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November 2018

Green Bonds: From evolution to revolution

Heike Reichelt's picture
Also available in: Français | 日本語 | العربية | Español
© ThickStock.com/Getty Images
© ThickStock.com/Getty Images

The first green bond issued by the World Bank 10 years ago created the blueprint for today’s US$500+ billion labeled bond market. This blog post looks at how green bonds changed investor and issuer behavior and how the same model can be applied to help achieve the Sustainable Development Goals.


The capital markets have evolved over the last 10 years from a market where investors knew - and cared - little about what their investments were supporting, to one where purpose matters more than ever. There’s a revolution in the bond markets that was sparked by green bonds.

The green bond market has grown from a market dominated by issuers like the World Bank, an international organization owned by 189 countries with the sole purpose of eradicating extreme poverty and boosting shared prosperity, to one that includes a broad range of issuers - from private companies and banks, to utilities and governments. The simple concept behind green bonds has expanded to other labeled bonds, including social bonds and blue bonds. 

Grüne Anleihen: von der Evolution zur Revolution

Heike Reichelt's picture
Also available in: English
© ThickStock.com/Getty Images
© ThickStock.com/Getty Images

Die erste, von der Weltbank vor 10 Jahren emittierte „grüne Anleihe“ wurde zur Vorlage für den mit mehr als 500 Mrd. US-Dollar bewerteten Öko-Wertpapiermarkt von Heute. In diesem Artikel wird betrachtet, wie sog. Green Bonds das Anleger- und Emittentenverhalten verändert haben und die gleichen Modelle angewandt werden können, um die Sustainable Development Goals (Ziele für eine nachhaltige Entwicklung) zu erfüllen.

Die Kapitalmärkte haben sich in den letzten zehn Jahren weiter entwickelt: von einem Markt, auf dem Anleger nur wenig darüber wussten (und wissen wollten), was durch ihre Investitionen unterstützt wird, hin zu einem, auf dem der Zweck wichtiger ist denn je. Diese Revolution auf dem Wertpapiermarkt wurde durch sog. „grüne Anleihen“ oder Green Bonds ausgelöst.

A Caribbean crystal ball: What can experience from Caribbean islands tell us about investing in climate resilience?

Kristalina Georgieva's picture
Also available in: Español | العربية | Français
A man walks amid destruction on a street in Roseau on the Caribbean island of Dominica following passage of Hurricane Maria. © CEDRICK ISHAM CALVADOS/AFP/Getty Images
A man walks amid destruction on a street in Roseau on the Caribbean island of Dominica following passage of Hurricane Maria. © CEDRICK ISHAM CALVADOS/AFP/Getty Images

In the Caribbean, people are already living in the future. It is world where climate change can seriously affect economic growth, government decisions and people’s jobs and lives. 
 
The recent report of the Intergovernmental Panel on Climate Change (IPCC) gave a stark warning of what happens if the world goes beyond the target of a 1.5 degree increase in temperature. At 2.0 degrees, we will see far worse droughts, floods, extreme heat and poverty for hundreds of millions of people. 

Today, climate change is intensifying pressure on communities and ecosystems all over the world, but the Caribbean countries are facing quite unique challenges. 
 

400 youth from 117 countries to present innovative ideas on how to invest in people

Alejandra de Lecea's picture
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Workshop participants discuss their innovative ideas at the 2017 World Bank Group Youth Summit. © World Bank
Workshop participants discuss their innovative ideas at the 2017 World Bank Group Youth Summit. © World Bank

Without investing in their people, countries cannot sustain economic growth, they will not have a skilled workforce ready for the jobs of tomorrow and they will not be able to participate effectively in the global economy.

That is why the World Bank Group is joining forces to increase investments in human capital - in the knowledge, skills and health that people accumulate throughout their lives.

Youth from all corners of the world will congregate in Washington DC for next week’s 2018 World Bank Group Youth Summit. This year’s Summit is designed to inspire fresh thinking on how to close the human capital gap.

During the two-day event, 400 students and young professionals from 117 countries will present innovative ideas to contribute to shrinking the human capital gap and foster the skills and well-being of individuals and will participate in sessions and workshops with experts from the World Bank Group, IBM, Intel, the United Nations and Stanford, among many others.

Innovative research has an impact against gender-based violence

Diana J. Arango's picture
Also available in: Español | Français
WBG/SVRI Development Marketplace 2018 winner Equal Playing Field is helping boys and girls in Papua New Guinea build social and soft skills to participate in advocacy campaigns to end gender inequality and violence against women and girls. © Equal Playing Field
World Bank Group/SVRI Development Marketplace 2018 winner Equal Playing Field is helping boys and girls in Papua New Guinea build social and soft skills to participate in advocacy campaigns to end gender inequality and violence against women and girls. © Equal Playing Field

Violence against women and girls is a global pandemic affecting one-third of women. It takes many forms, including female infanticide, female genital mutilation, battering, rape, sexual abuse, harassment and intimidation, trafficking, and forced prostitution. It occurs in the home, on the streets, in schools, workplaces, farm fields, and refugee camps, during times of peace as well as in conflicts and crises.

To stem violence, it is crucial that countries and program implementers are informed by evidence on what works best. There needs to be a stronger, broader knowledge base about prevention and response that can inform investments, policy and practice.

How Islamic finance can boost infrastructure development

Joaquim Levy's picture
Also available in: العربية | Français
Queen Alia International Airport, Jordan. © littlesam/Shutterstock
Queen Alia International Airport, Jordan. © littlesam/Shutterstock

In many developing countries, there are glaring gaps in the quantity of infrastructure per capita. For example, power generation capacity per person in these countries is only one-fifth that of advanced economies. We know that expanding infrastructure investment in economic and social services is an effective way both to promote inclusive growth and to foster local resilience to global shocks. In particular, investment in quality, sustainable infrastructure helps finance the transition towards a low-carbon, more environmentally friendly economic model. This happens notably in the renewable energy and low-emission transport sectors. Given the scale of resources needed to address the infrastructure investment gap, mobilizing the private sector for this goal has become imperative, especially in countries where financial transactions in banking and capital markets follow Islamic law (or shari’ah) principles.
 
The conventions of Islamic finance are particularly suitable for infrastructure development. They define an asset-oriented system of ethical financial intermediation built on the principles of risk-sharing in lawful activities (halal) rather than rent-seeking gains. This “entrepreneurial” approach by investors requires a high degree of transparency and creates incentives to monitor projects more carefully, which, in turn, strengthen the efficiency in building and operating infrastructure.

Fighting corruption: the importance is crystal clear

Kristalina Georgieva's picture
Also available in: Español | العربية | Français
© Katie Stevens/Shutterstock
© Katie Stevens/Shutterstock

My parents didn’t know that the name they chose for me meant “transparent” in Spanish. But they did know the importance of transparency, honesty and integrity, and passed on to me these values when I was growing up in Bulgaria. I hold them dear in my work at the World Bank. 

A lack of transparency fuels corruption, a corrosive force that hits the poor and the vulnerable the hardest. Its effects are very real. Corruption stops medicine and drugs from reaching the sick, stops schools from being built, leads to roads washing away in the rain, and empties the public coffers. In the most fragile corners of the world, corruption undermines work to bring stability or prevent violence and extremism from taking root. 

Paris Peace Forum - Preventing conflict in 2018, 100 years after the Armistice

Franck Bousquet's picture
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Paris Peace Forum. © Ibrahim Ajaja/World Bank
Paris Peace Forum. © Ibrahim Ajaja/World Bank

This week marks 100 years since the end of World War I. One hundred years since an armistice encouraged battling sides to lay down their arms and usher in peace. Many of us – the lucky ones – still enjoy peace. We go to work, to school, to the playground, to shops and restaurants all with a sense of safety and security. But that is not the case for many people around the world. Wars still rage in Syria, Yemen and Iraq, and violent conflict mars communities in every region of the globe.
 
Also this week, world leaders are in France – site of the 1918 Armistice signing – for the Paris Peace Forum. They are marking the occasion, but also working to address the international tensions that cause unrest in our day and age, and the initiatives aimed at preventing them: cooperation to fight climate change, resource scarcity, globalization and technological disruptions; institutions to channel power rivalries and administer global public goods; justice to assuage grievances and frustration, regulation to address inequalities and abuses of power; and peacebuilding and security.
 
I participated in the Forum yesterday with other colleagues from the World Bank and highlighted the plight of one group for whom conflict and fragility make worse an already tenuous situation: the world’s poor.

Tackling gender inequality through investments in health equity

Kristalina Georgieva's picture
Also available in: العربية | Français | Español
© Dominic Chavez/Global Financing Facility

Still today, in almost all societies around the world, women are less well-off than men. Women are still paid less than men; they are less represented in business, politics and decision-making. Their life chances remain overwhelmingly less promising than those of men. 
 
This inequality hurts us all. The world would be 20% better off if women were paid the same as men. Delaying early marriage in the developing world by just a few years would add more than $500 billion to annual global economic output by 2030. 
 
But this is more than a problem of lost income. For women and girls in poor countries, it cuts life short before it can flourish.  
 
Today, 830 women will die from complications related to pregnancy or childbirth. This month, 450,000 children under the age of five will die. This year, 151 million children will have their education and employment opportunities limited due to stunting. If current trends continue, 150 million more girls will be married by 2030.
 
Clearly, we need to accelerate progress so that no woman or child is left behind.