Adapting ESG-linked Issuance for Emerging Market Sovereigns’ Net Zero Ambitions

Middle- and high-income emerging markets are unlikely to receive climate investment grants or debt-for-climate swaps, but still have an important role in climate mitigation. Issuance structures such as Environmental, Social, and Governance (ESG) -linked bonds could be adapted to suit the situation of these markets, especially those that need more than just ‘green’ investment to achieve Net Zero targets.

An International Monetary Fund (IMF) report casts doubt on the prospects of significant ‘scale-up’ of debt-for-climate swaps compared to other forms of climate investmentsOther forms of climate investment, such as ESG- and other sustainability-linked bonds, hold promise, particularly for climate investment in medium- and high-income emerg...