Blue Bonds

Blue Bonds (sometimes styled Blue Bonds for Conservation) is a project of the Nature Conservancy (TNC), the world’s largest nongovernmental environmental organization. Blue Bonds aims to increase government investments in marine conservation projects by assisting countries in national sovereign debt restructuring, on the condition that a portion of the cost savings are used on marine environmentalist projects. 1

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At-A-Glance

Type: Non-profit, Other
Issue Areas: Environmental Policy
Website: nature.org/en-us/what-we-do/our-insights/perspectives/an-audacious-plan-to-save-the-worlds-oceans
Parent Organization:

The Nature Conservancy

Contents

    Background

    On April 15, 2019, The Nature Conservancy announced the launch of Blue Bonds through a post on its website. The project is intended to assist governments of island and coastal nations in investing in marine-environmental initiatives. 1

    To finance these investments, TNC connects public, nonprofit, and private investors with financial institutions through Blue Bonds in order to refinance the sovereign national debts of qualifying countries. Blue Bonds assists in debt refinancing on the condition that beneficiaries use a portion of the savings refinancing to establish environmental regulations on at least 30% of their near-shore ocean areas, engage in ongoing conservation projects, improve fisheries management, and take steps to reduce pollution. Throughout the process, TNC and Blue Bonds offer advice and guidance to the countries involved in developing the entailed conservation efforts, ensuring compliance with the conservation conditions of a given bond. 1

    TNC detailed several similar projects it had taken on in the past. For instance, in 2016, the organization worked with the Republic of Seychelles to restructure a portion of the country’s national sovereign debt, resulting in an annual savings of $430,000 which was devoted to marine conservation. By 2020, the savings resulted in the establishment of 410,000 square kilometers of marine protected areas. Blue Bonds proposed far more stringent environmentalist conditions on debt refinancing than former TNC projects. 21

    In addition to its announcement on its website, TNC produced a short promotional video for Blue Blonds that TED Conferences, LLC (popularly known as TED or TED Talks) posted on its YouTube channel on June 7, 2019. 3

    Activity

    On October 8, 2020, the Washington Post reported that TNC had hired investment bank Credit Suisse to serve as its conduit to Wall Street firms to reassure investors with no experience investing in sovereign debt refinancing. The article also reported that the organization plans to package each of its bonds with an insurance policy provided by the United States International Development Finance Corporation, a federal agency created in 2018 to help investors in the U.S. compete with Chinese banks, to decrease the level of risk associated with the bonds. 4

    The Nature Conservancy

    The Nature Conservancy is the world’s largest environmental conservation organization. 5 TNC holds 3.1 million acres of land in the United States under conservation easements for the purpose of ecological preservation. 6 TNC has advocated for taxes on carbon emissions in the past and describes climate change as the “most serious threat facing our planet.” 78 Notably, unlike similarly aligned environmentalist organizations, TNC supports nuclear energy as an alternative to and replacement for conventional energy sources. 9

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    References

    1. “Blue Bonds: An Audacious Plan to Save the World’s Oceans.” The Nature Conservancy. April 15, 2019. Accessed February 2, 2020. https://www.nature.org/en-us/what-we-do/our-insights/perspectives/an-audacious-plan-to-save-the-worlds-oceans/
    2. Damanaki, Maria and Karin Erika Kemper. “Innovation Drives Seychelles Blue Economy Approach.” The Nature Conservancy. March 23, 2018. Accessed February 2, 2020. https://www.nature.org/en-us/what-we-do/our-insights/perspectives/innovation-drives-seychelles-blue-economy-approach/
    3. “An ingenious proposal for scaling up marine protection | The Nature Conservancy.” YouTube: TED. June 7, 2019. Accessed February 2, 2020. https://www.youtube.com/watch?v=ttcJMNlKif4&feature=emb_title&ab_channel=TED
    4. Rahim, Saqib. “How investors are coming up with the green to save the ocean blue.” The Washington Post. October 28, 2020. Accessed February 2, 2020. https://www.washingtonpost.com/climate-solutions/2020/10/28/climate-solutions-ocean-conservation/
    5. “#20 Nature Conservancy.” Forbes. December 11, 2018. Accessed February 2, 2020. https://www.forbes.com/companies/nature-conservancy/#7d2d76c541d2
    6. “Land Easements.” The Nature Conservancy. Accessed February 2, 2020. https://www.nature.org/en-us/about-us/who-we-are/how-we-work/private-lands-conservation/?tab_q=tab_container-tab_element_670#link00
    7. “Our Priorities: Tackle Climate Change.” The Nature Conservancy. Accessed February 2, 2020. https://www.usclimatenetwork.org/annual_reports https://www.nature.org/en-us/what-we-do/our-priorities/tackle-climate-change/
    8. “What the Paris Agreement means for carbon pricing and natural climate solutions: A business guide.” The Nature Conservancy. March 2019. Accessed February 2, 2020. https://www.nature.org/content/dam/tnc/nature/en/documents/Carbon_Pricing_NCS_White_Paper.pdf   
    9. “The Science of Sustainability.” The Nature Conservancy. October 15, 2018. Accessed February 2, 2020. https://www.nature.org/en-us/what-we-do/our-insights/perspectives/the-science-of-sustainability/