Greening Sovereign Debt Performance - Shared Risk and Rewards in Financing the Transition

Sovereign bond markets need to quickly and radically innovate in order to successfully integrate climate- and nature-related risks, and therefore finance the transition to a net zero, nature positive world, finds a new report from Finance for Biodiversity(F4B). The report also sets out why more and more issuers and investors are using performance-linked debt instruments, such as sustainability-linked or key performance indicator (KPI) instruments.

Valued at US$88 trillion, sovereign debt markets are a critical part of the global financial system, and from which much of the unprecedented investment flows of capital (c. US$100 trillion by 2050) required to finance the transition to a net zero, nature positive global economy must come.

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