SEC identifies qualified projects for ‘blue bonds’ 

Projects and activities to be funded via the issuance of “blue bonds” should support specific items under the United Nations Sustainable Development Goals (UN SDGs), the corporate regulator said.

In newly released guidelines, the Securities and Exchange Commission (SEC) said initiatives using proceeds from the offering of blue bonds — or instruments that support water management and ocean protection, among others — should contribute to SDGs 6 and/or 14.

The two UN goals respectively aim to ensure the availability and sustainable management of water and sanitation, and conserve and sustainably use the oceans, seas and marine resources for sustainable development.

On Sept. 21, the corporate regulator issued Memorandum Circular (MC) No. 15, which contains the guidelines on eligible blue projects and activities for the issuance of blue bonds in the Philippines. 

According to the SEC, proceeds from blue bonds should only be used to finance or refinance new and/or existing “blue” initiatives. These include ecosystem management and natural resources restoration of coastal, marine, river, lake, and other marine- or water-based ecosystems, sustainable fisheries management, and sustainable aquaculture. 

The SEC said the contribution of the projects to the SDGs should be assessed and quantified “if possible” by the issuer of the blue bonds.

“Quantifiable performance measures include greenhouse gas emissions reduced or avoided, ocean-based renewable power generation or energy savings, water savings, plastic waste reduced or avoided, and wastewater treated or avoided, among others,” the SEC said.

As blue bonds are a subset of green bonds and sukuk, the SEC said the issuers of blue bonds should also comply with MC No. 12 series of 2018 or the guidelines for the issuance of ASEAN green bonds under the ASEAN green bonds standards in the Philippines. 

“The guidelines are based on the blue finance guidance framework developed by the International Finance Corp. and the green and blue bond framework of the Asian Development Bank,” the SEC said. 

“The issuance of blue bonds must also comply with sections 8 and 12 of Republic Act No. 8799, or the Securities Regulation Code, on the registration of securities,” it added. — Revin Mikhael D. Ochave