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Green Bonds and Investment Performance

Markets regulator <keyword id="19901201" type="General" weightage="20" keywordseo="Sebi" source="keywords">SEBI</keyword> has proposed expanding the <keyword id="22367248" type="General" weightage="20" keywordseo="sustainable-finance-framework" source="keywords">sustainable finance framework</keyword> in the <keyword id="20922662" type="General" weightage="20" keywordseo="securities-market" source="keywords">securities market</keyword> by introducing a new category of financial instruments. This category will include <keyword id="20518791" type="General" weightage="20" keywordseo="Social-Bonds" source="keywords">social bonds</keyword>, <keyword id="22623575" type="General" weightage="20" keywordseo="Sustainable-Bonds" source="keywords">sustainable bonds</keyword>, and <keyword id="22623576" type="General" weightage="20" keywordseo="Sustainability-linked-Bonds" source="keywords">sustainability-linked bonds</keyword>, in addition to the current <keyword id="22819966" type="General" weightage="20" keywordseo="green-debt-securities" source="keywords">green debt securities</keyword>. It aims to provide issuers with flexibility in raising funds for projects that align with environmental, social, and governance (ESG) objectives. In a consultation paper released on Friday, SEBI proposed that issuers, in addition to existing green debt securities, should be allowed to raise funds through issuance of social bonds, sustainable bonds, and sustainability-linked bonds. These bonds will collectively be known as ESG Debt Securities. This will enable issuers to raise money for more sustainable projects, assisting in closing the funding gap for the Sustainable Development Goals. SEBI said it received representations from market participants including the Confederation of Indian Industry to expand the scope of the regulatory framework pertaining to sustainable finance to include social bonds, in addition to existing green debt securities as a mode of raising sustainable finance, in line with global practices. As per the consultation paper, SEBI said, it "proposed to introduce the concept of sustainable securitised debt instruments for the purpose of providing originators of the underlying credit facilities which are within such international or domestic frameworks for sustainable finance, and thereby provide investors as well an opportunity to participate in the sustainable securitised debt instruments". The consultation paper also addressed the initial and continuous disclosures for sustainable securitised debt instruments that would be based on international frameworks. Initial disclosures could be made in the offer document for the securities, while continuous disclosures might be included in annual reports or other mandated formats. The markets watchdog also suggested that issuers of ESG debt securities and sustainable securitised debt instruments appoint an independent external reviewer or certifier, to facilitate transparency and credibility. The review could take various forms including, second-party opinions, verification, certification, or scoring/ rating. The <keyword id="19901204" type="General" weightage="100" keywordseo="Securities-and-Exchange-Board-of-India" source="keywords" meta.keywordsubtype="org" meta.entityname="Securities and Exchange Board of India" meta.hostid="261" meta.entityid="Securities and Exchange Board of India">Securities and Exchange Board of India</keyword> (SEBI) has invited comments and suggestions from the public on the consultation paper by September 6.

SEBI proposes expansion of sustainable financial framework in securities market

<keyword id="19895063" type="General" weightage="20" keywordseo="India" source="keywords">India</keyword> requires an investment support of USD 1.4 trillion — an average of USD 28 billion per year — to become a net-zero economy by 2070 and raising <keyword id="20260327" type="General" weightage="20" keywordseo="financial-resources" source="keywords">financial resources</keyword> for adaptation and mitigation action of this scale is an "unprecedented challenge", according to the <keyword id="20613906" type="General" weightage="20" keywordseo="Economic-Survey" source="keywords">Economic Survey</keyword> 2023-24 tabled in Parliament on Monday. Reaching net zero means achieving a balance between greenhouse gas emissions and the amount of these gases removed from the atmosphere by either natural processes, such as photosynthesis, or by other methods of carbon capture and storage. The consolidated report on the state of the economy in the previous year said India's climate action has been largely financed through domestic resources and the flow of international finance has been "very limited". Citing the Reserve Bank of India's (RBI) data, the report said bridging the "substantial funding gap" necessitates allocating 2.5 per cent of India's annual Gross Domestic Product (GDP) to <keyword id="20018880" type="General" weightage="20" keywordseo="green-finance" source="keywords">green finance</keyword>. "Preliminary estimates indicate that the aggregate investment support required by India to achieve its 2070 net-zero target will be USD 1.4 trillion at an average of USD 28 billion per year. Raising financial resources for <keyword id="19907392" type="General" weightage="20" keywordseo="climate-change" source="keywords">climate change</keyword> adaptation and mitigation actions of this scale is an unprecedented challenge," the document read. A 2022 report by the Climate Policy Initiative found that domestic sources accounted for the majority of green finance in India, at 87 per cent and 83 per cent in financial years 2019 and 2020 respectively. While international sources are increasing (from 13 per cent in FY 2019 to 17 per cent in FY 2020), the economic survey said they are still insufficient to meet India's net-zero target. "Mobilising substantial capital from traditional sources presents multifaceted challenges in emerging economies like India. The perceived sovereign risks associated with emerging market and developing economies (EMDEs) and the capital-intensive nature of such projects, coupled with lengthy gestation periods and evolving regulatory frameworks, can create misalignment between investor expectations and project timelines," the government said. The economic survey also noted that the flows of global capital to <keyword id="20200084" type="General" weightage="20" keywordseo="developing-countries" source="keywords">developing countries</keyword> have been impeded by high costs of capital. Despite securing a good rating on its green-bond framework, Indian sovereign <keyword id="20177085" type="General" weightage="20" keywordseo="green-bonds" source="keywords">green bonds</keyword> have hardly received any "greenium" from private investors. It is more a "wall of capital" than a "flood of capital" that is waiting to fund energy transition in EMDEs. It is just not mobile. All of these together have severely hampered the flow of finance for green-transition projects, the survey said. "Greenium" or green premium refers to the savings an issuer of a green bond realises on the associated coupon payment because the bond is green. Financial support to help middle-income and poor countries fight climate change will be at the centre of this year's UN climate conference in Baku, Azerbaijan, where the world will reach the deadline to agree on the New Collective Quantified Goal (NCQG) -- the new amount developed nations must mobilise every year starting 2025 to support climate action in developing countries. But achieving consensus will not be easy, given the disappointing progress made on major conflict points at the mid-year UN climate talks in Bonn, Germany. At the 2009 UN climate conference in Copenhagen, rich nations pledged to provide USD 100 billion annually from 2020 to help developing countries mitigate and adapt to climate change. However, delays in achieving this goal have eroded trust between developed and developing nations and have been a continual source of contention during annual climate negotiations. In May, the Organisation for Economic Cooperation and Development (OECD) claimed that developed countries had met the long-standing USD 100 billion-a-year promise by providing nearly USD 116 billion in <keyword id="20000757" type="General" weightage="20" keywordseo="climate-finance" source="keywords">climate finance</keyword> to developing countries in 2022, with nearly 70 per cent of the money given in the form of loans. However, international non-profit organisation Oxfam last week said climate finance provided by rich countries in 2022 totalled no more than USD 35 billion. Developing nations argue that they cannot be expected to reduce carbon dioxide (CO2) emissions faster if developed countries -- historically responsible for climate change -- do not provide enhanced financial support. Rich countries are now expected to raise more than USD 100 billion, with developing countries, including India, demanding trillions of dollars to tackle climate change.

Raising massive financial resources for net-zero goal unprecedented challenge: Economic Survey

On Monday, July 22, Finance Minister <keyword id="22504403" type="General" weightage="20" keywordseo="nirmal-sitharaman" source="keywords">Nirmal Sitharaman</keyword> tabled the <keyword id="20613906" type="General" weightage="100" keywordseo="economic-survey" source="keywords">Economic Survey</keyword> 2023-24 in the parliament ahead of the much-awaited budget 2024 tomorrow. In addition to a socio-economic stock take, the comprehensive report also outlines the strides India has made on the environment and climate fronts last year. India is in a weird grey area when the climate blame-game is concerned. We continue to average some of the lowest per capita CO2 emissions in the world. But, being the most-populous country in the world, these small bits add up to make India the third-largest emitter of CO2 in the world, after China and the United States. <div type="Article" hostid="261" msid="111923746" title="Economic Survey 2023-2024 highlights emerging job trends in AI, Cybersecurity, 3D Printing and Web Development" mstype="2" mssubtype="0"></div>However, this is not to say that the country has been sitting the green transition out either. As highlighted in the Economic Survey, India has been making notable strides in tackling climate change and promoting <keyword id="19895783" type="General" weightage="20" keywordseo="sustainability" source="keywords">sustainability</keyword> — efforts that will be crucial to protect billions in the coming years and decades. Let's take a look at these efforts and compare them with findings from other recent environmental reports to see the full picture. <h2><keyword id="21818512" type="General" weightage="20" keywordseo="emission-intensity" source="keywords">Emission intensity</keyword> reduction</h2>The economic survey proudly states that India has reduced the emission intensity of its GDP by 33% from 2005 levels by 2019. This means the country is producing less greenhouse gas for every unit of economic activity. This is a commendable achievement because India’s original climate change target — or Nationally Determined Contribution — was set to precisely 33% reduction of emission intensity by 2030, before being revised to 45% in 2022. While the jump from 33% to 45% is still a significant one with barely half a decade to go, this progress is a clear sign that India’s climate policies are having a real impact. <h2><keyword id="19895602" type="General" weightage="20" keywordseo="renewable-energy" source="keywords">Renewable energy</keyword> capacity</h2>According to the economic survey, 45.4% of India’s installed electricity generation capacity — which includes solar, wind, and hydropower — now comes from non-fossil sources, as of May 31, 2024. <div type="Article" hostid="261" msid="111774972" title="Economic Survey shows India&amp;#39;s energy needs to grow 2.5x, healthy growth in formal employment" mstype="2" mssubtype="0"></div>As per reports by the Ministry of New &amp; Renewable Energy, India added a record renewable energy capacity of 18.48 GW in 2023-2024, with solar installations amounting to 12.78 GW, followed by 2.27 GW of wind energy. However, industry experts have also noted that India Inc. cannot afford to run out of steam now, and must continue to add at least 50 GW for the next six years to meet the target of 500 GW of renewables by 2030. <h2>Indian energy needs</h2>India's energy needs are expected to grow 2 to 2.5 times by 2047, as per the latest economic survey. This necessitates a balanced approach to <keyword id="19951336" type="General" weightage="20" keywordseo="energy-transition" source="keywords">energy transition</keyword> that considers resource limitations and the need for resilience to climate change. India has suffered from an overdependence on coal and fossil fuels in the past, accounting for around 75% of total energy generation in 2021, as per the Energy Information Administration. However, this number has been quickly falling, even dropping below a historic 50% in Q1 2024. <h2>Sovereign <keyword id="20177085" type="General" weightage="20" keywordseo="green-bonds" source="keywords">green bonds</keyword></h2>To fund green projects, India issued Rs 16,000 Crore in sovereign green bonds — financial instruments that support green projects at lower capital costs — in early 2023 and another Rs 20,000 Crore later in the year, the economic survey reports. As per the government, these proceeds were utilised in many eco-friendly projects, such as New and Renewable Energy, Environment, Forests and Climate Change, Housing and Urban Affairs, Railways. To widen the investor base, the <keyword id="19899810" type="General" weightage="20" keywordseo="reserve-bank-of-india" source="keywords">Reserve Bank of India</keyword> (RBI) also recently permitted eligible foreign investors to invest in such bonds. <h2>Mission LiFE and Green Credit Programme</h2>The survey also talks extensively about Mission LiFE (Lifestyle for Environment), which promotes sustainable living, and the Green Credit Programme (GCP), which incentivises eco-friendly actions by offering “green credits”. In the past few months, Madhya Pradesh, Telangana and a few other states have reportedly approved thousands of hectares of degraded forest land for greening exercises as part of the GCP. <h2>International initiatives</h2>India has spearheaded several international initiatives such as the International Solar Alliance (ISA), One World, One Sun, One Grid (OSOWOG), the Coalition for Disaster Resilient Infrastructure (CDRI), the Infrastructure for Resilient Island States’ (IRIS) and the Leadership Group for Industry Transition (LeadIT). Hundreds of nations are signed up for these climate coalitions and our participation will help reflect India's commitment to advancing global <keyword id="20000756" type="General" weightage="20" keywordseo="climate-action" source="keywords">climate action</keyword> and fostering international cooperation in sustainable development. <div type="Article" hostid="261" msid="111923191" title="Economic Survey 2024 – industries grow by 9.5%, fueling economic growth to 8.2%" mstype="2" mssubtype="0"></div>The report even notes that India is currently the only G20 nation who is set not to cross the 2°C warming threshold. All in all, India’s economic survey and environmental reports together show a nation making impressive progress in combating climate change and advancing sustainability. These achievements will hopefully set a strong example for other countries to follow.

On the right track — Economic Survey 2023-24 outlines India’s commendable climate action

<ul class="summary-list"><li>Raja Rajamannar, chief marketing and communications officer of Mastercard, is one of BI's <a target="_blank" class="" href="https://www.businessinsider.com/most-innovative-chief-marketing-officers-2024-6">"Most Innovative CMOs"</a> of 2024.</li><li>Tapping into people's passions can inspire emotional connections with consumers.</li></ul>Marketers have long understood that emotion, not logic, drives most consumer behavior. A staggering 92% of purchasing decisions are driven by emotion, according to a Harvard Business School study. The idea dates all the way back to the 1950s, when television came to the fore and gave brands a groundbreaking medium for compelling, emotionally driven storytelling.Considering the profound advances in media, technology and connectivity since then, marketers are still strategizing about how to stir people's emotions. With attention more fragmented than ever, making a truly emotional connection has become a tall task. In this incredibly chaotic landscape, marketing leaders looking for a future-ready strategy are focusing on people's passions as a way to capture attention and affection — and achieve long-term growth.<h2 id="9ec2275f-ced8-47a4-97f9-c923b1aa3313">Focus on what unites us</h2>Defining your audience by its passions — and tapping into the positive emotions people associate with those passions — can be an effective way to connect in today's overwhelming environment. Instead of segmenting consumers by geography or age, targeting people by their passions like music, sports, food, or travel allows marketers to transcend traditional demographics.Recently completed proprietary research from Mastercard reveals just how powerful passions can be as a way to forge stronger connections with consumers. Three-quarters of people surveyed across eight markets say engaging in their passions is a part of their identity. Not only that, but passion-focused activities offer a form of stress relief and make them feel more like themselves, per the study. Music, often referred to as the universal language, is a prime passion category that unites and inspires. Take the recent<a target="_blank" href="https://www.contagious.com/news-and-views/cannes-lions-2024-entertainment-winners"> Johnnie Walker campaign</a> that aimed to give long-overdue recognition to the 88-year-old "forgotten mother of Bossa Nova" Alaíde Costa for her role in pioneering the smooth and rhythmic Brazilian music genre. It culminated in a Carnegie Hall concert, which she was denied decades ago. Powerful. The campaign went on to win a Cannes Lions Grand Prix in June in the music category.Mastercard embraces this passion-based approach to engage a wider audience in more meaningful ways. By focusing on what truly excites people, we're able to curate unique experiences for a broader range of cardholders, fostering deeper and more lasting connections. Our <a target="_blank" href="http://priceless.com">priceless.com</a> site offers a variety of special experiences, categorized by passion and available only with Mastercard.<h2 id="f850eeb1-dd6f-44f5-b754-0dc3fa74ed87">The proof is in the passion</h2>The days of brands brashly pushing ads on people are over. Consumers expect brands to add value to their lives, and marketers must be able to deliver on that expectation in new and dynamic ways. The research suggests a significant opportunity for brands: people want brands to act as an "incentivizer" in the passion space, rewarding them and helping them feel justified pursuing their passions.In fact, our survey data identifies eight key roles that brands can play to either accelerate consumers' passions or alleviate their frustrations — one of which is fostering shared connections around their passions. A prime example of this is how Nike taps into peoples' passion for wellness, which is ranked the second highest among those we surveyed, while strengthening community bonds. Nike has cultivated a global community through its <a target="_blank" href="https://affiliate.insider.com?h=dbba50699d99b1a6fd0474ee43e851742a7cae2f110133f30d422b3b1cdb97b9&amp;postID=670060ce0c43543ec7aada6f&amp;postSlug=consumers-passions-emotional-connection-stronger-marketing-strategy-growth-behavior-audience-2024-10&amp;site=bi&amp;u=https%3A%2F%2Fwww.nike.com%2Fnrc-app">Nike Run Club </a>app, which brings runners together virtually and physically. The app provides coaching, tracking, and social features, connecting people over their shared passions for running. They also host live running events and challenges to further foster this sense of community.<h2 id="ae05c97c-10b6-4f61-8e5a-6528f6327668">The complexity of emotion</h2>Traditional market research involves surveying people to understand their purchasing motivations. While this is effective in some cases, uncovering the emotions consumers associate with a brand or product is often too complex a task for this type of research. For instance, someone who prefers blue candy to green may attribute the preference to taste but, in reality, may be influenced by a positive association with the color itself. When consumers respond to surveys, they often overly rationalize or deliberate their reasoning, not capturing the complete emotional story.We must continue to find new ways to understand impact. One powerful solution is neuromarketing, which taps into neuroscience to understand the subconscious drivers of emotion. Neuromarketing can derive an abundance of data-driven insights from study participants, allowing us to discern consumers' emotional associations with logos, messages, storylines, colors, and more. By revealing how brands truly resonate with people, neuromarketing offers new opportunities to enhance the effectiveness of their campaigns.Inspiring an emotional response is an incredibly challenging task for marketers at a time when consumers feel bombarded by messages. By tapping into the interests people already identify with and feel connected to, brand leaders can step forward as purveyors of passion — creating emotional impact that consumers will never forget.

The power of passions: Tapping into consumers' emotional bonds

Green Bonds and Sustainable Finance

Recently, the world bid farewell to Maria Branyas Morera, who, at 116 years old, held the title of the world’s oldest living person. Her passing marks the end of an era, but it also sparks a certain curiosity: what habits allowed her and others like her to reach such incredible ages? To answer this question, let's take a short tour. From the sunny shores of Okinawa to the quiet towns of Sardinia, certain communities are known for producing an unusual number of <keyword id="20806686" type="General" weightage="20" keywordseo="centenarians" source="keywords">centenarians</keyword> — people who live to be 100 years old or more. These "<keyword id="22878860" type="General" weightage="20" keywordseo="Blue-Zones" source="keywords" meta.keywordsubtype="org" meta.entityname="Blue Zones" meta.hostid="261" meta.entityid="Blue Zones">Blue Zones</keyword>" hold the secrets to a longer, healthier life, distilled into what Emmy-award winning researcher Dan Buettner calls the "Power 9." Let’s dive into these nine habits that could be your ticket to living a life that’s not just long, but full of vitality. <h3 style="line-height:1.2;margin-top:14pt;margin-bottom:4pt;">1. You Gotta Move It, Move It</h3>Forget the gym membership or the marathon training. The world’s oldest people have never heard of CrossFit, and yet, they move constantly. How? By integrating movement into their daily routines. Whether it’s gardening, walking to the market, or dancing to their favourite tunes, these centenarians keep their bodies in motion without ever stepping foot on a treadmill. <h3 style="line-height:1.2;margin-top:14pt;margin-bottom:4pt;">2. Know Your “Why”</h3>In Okinawa, they call it “ikigai”; in Nicoya, Costa Rica, it’s “plan de vida.” These terms translate to something more profound than just a job or a daily grind — they represent a deep-seated purpose that gets you out of bed every morning. Whether it’s taking care of family, volunteering, or simply enjoying life’s small pleasures, knowing your "why" could add years to your life. <div type="Article" hostid="261" msid="112705068" title="World’s oldest person Maria Branyas Morera passes away at 117; Japan’s 116-year-old Tomiko Itooka now oldest" mstype="2" mssubtype="0"></div><h2>3. Relax, It’s Happy Hour Somewhere</h2>Stress is inevitable, but chronic stress is not. The longest-living people in the world have all figured out how to downshift — whether it’s through daily naps, a moment of prayer, or a glass of wine at sunset. These simple rituals are as effective as they are enjoyable, helping to reduce inflammation and stave off age-related diseases. <h3 style="line-height:1.2;margin-top:14pt;margin-bottom:4pt;">4. Eat Until You’re Almost Full</h3>In a world of supersized meals and never-ending buffets, the 80% rule stands out like a beacon of common sense. Known as “hara hachi bu” in Okinawa, this practice involves stopping eating when you’re about 80% full. It’s a simple way to prevent overeating and maintain a healthy weight — two factors that are key to <keyword id="20186177" type="General" weightage="20" keywordseo="longevity" source="keywords">longevity</keyword>. <h3 style="line-height:1.2;margin-top:14pt;margin-bottom:4pt;">5. Beans, Greens, and Everything in Between</h3>If you want to live long, it might be time to rethink your relationship with meat. In Blue Zones, the diet is predominantly plant-based, with beans, lentils, and vegetables forming the cornerstone of most meals. Meat, when it is consumed, is more of a side note than the main event. <h3 style="line-height:1.2;margin-top:14pt;margin-bottom:4pt;">6. Drink to Your Health — Literally</h3>Yes, even wine makes the list. But before you pop that cork, remember that moderation is key. The world’s oldest people drink one to two glasses a day, often in the company of friends or with a meal. This isn’t about getting tipsy; it’s about enjoying the moment and reaping the benefits of a little bit of red wine on your heart. However, it may be important to know that scientific consensus still remains mixed on the matter. Some researchers assert that drinking in moderation can help with overall well-being, while others (and the World Health Organization) vehement that there is no “safe amount” to drink everyday. <div type="Article" hostid="261" msid="112589784" title="How to invest 3% of your day in exercise to live longer, according to an expert in healthy aging" mstype="2" mssubtype="0"></div><h3 style="line-height:1.2;margin-top:14pt;margin-bottom:4pt;">7. Find Your Tribe</h3>There’s a reason why social media can’t replace face-to-face interaction. In Blue Zones, Dan explains that being part of a faith-based or community group is common in these parts, alleging that research has shown that attending services or gatherings regularly can add up to 14 years to your life. <h3 style="line-height:1.2;margin-top:14pt;margin-bottom:4pt;">8. Family Matters</h3>Family is not just about who you’re related to by blood. In Blue Zones, centenarians often live with or near their families, taking care of one another in a way that strengthens emotional bonds and lowers disease rates. They commit to life partners and invest time in their children and grandchildren, ensuring that love and care flow both ways. <h3 style="line-height:1.2;margin-top:14pt;margin-bottom:4pt;">9. You Are the Company You Keep</h3>Ever heard the saying that you’re the average of the five people you spend the most time with? It’s especially true when it comes to longevity. In places like Okinawa, people form lifelong bonds with a close-knit group of friends — these relationships provide emotional support and encourage healthy behaviours, making them a key ingredient in the recipe for a <keyword id="22490492" type="General" weightage="100" keywordseo="long-life" source="keywords">long life</keyword>.

What habits do the world's oldest people have that help them live so long and healthily?

<ul class="summary-list"><li>The market for bonds financing water conservation projects is approaching a "tipping point."</li><li>The market is small, just about $5 billion, but it's seeing more enthusiasm than the early green bond market. </li></ul>Blue is the next green for sustainable finance. Blue bonds — debt that allows investors to finance water conservation efforts — are gaining traction."I would liken the blue bond market today to where the green bond market was 10 to 15 years ago," Matt Lawton, a portfolio manager from T Rowe Price, told Business Insider. Today, the green bond market is valued at around $2 trillion. Compared to that, the blue bond market is much smaller, just about $5 billion, but it's on the cusp of a big change, Lawton explained. He's seeing even more enthusiasm around the asset than he observed for green bonds when they were at the stage blue bonds are today.Lawton is part of the effort to launch the <a href="https://www.bloomberg.com/news/articles/2023-11-20/t-rowe-ifc-seek-investors-for-blue-emerging-market-bond-fund">first blue bond strategy</a>, and is seeking commitments from investors for a fund that will make investments in the space. "It's a very nascent market today," he explained. "So one is not able to go out and invest several billion into blue bonds because the market doesn't exist. So what we're endeavoring to do is actually build out the market ourselves."The firm has partnered with the International Finance Corporation, a member of the World Bank Group. They've each committed to putting up to $75 million into the strategy and will be looking to raise another $350 million t0 $450 million from investors. The fund would target a return 3% to 6% over the US Treasuries yield curve."Blue is kind of at that tipping point where there's a lot more enthusiasm and engagement amongst capital market participants, investors, underwriters, issuers," Lawton said. "I think we're at this tipping point, whether it tips in '24 or '25 or '26, I have a high degree of confidence it's going to happen. I couldn't pinpoint the exact date, but it does feel like we're on the precipice," he added. <h3>The economic argument</h3>Blue bonds can finance anything from biodiversity and marine conservation to projects aimed at preventing overfishing to plastic pollution cleanup. But for all its climate and sustainability goals, there's a compelling economic reason investors would put their money into the bonds, Lawton explained."Take, for instance, water sanitation, a utility, right? Long-term contracts, high recurring cash flows, there's a pretty strong economic argument to be made for investing in those types of bonds."That's worth noting given the current backdrop for sustainable financing conversations. ESG investing has come under fire in the past year, driven by a wave of anti-woke sentiment. Climate-focused mutual funds <a href="https://markets.businessinsider.com/news/funds/climate-change-esg-investing-mutual-funds-interest-rates-anti-woke-2024-1">sales dropped by 75% in 2023.</a>But blue bonds seem to have sidestepped the vitriol, in part because it's a heavily under-invested theme (less than <a href="https://www.man.com/maninstitute/blue-bonds-sustainable-debt#:~:text=From%202018%20to%202022%2C%20there,of%20the%20sustainable%20debt%20market.">0.5% of the total sustainable debt market</a>), but also because of that financial appeal."For all the politicization of ESG, this is one of those few topics that we can all agree on," Lawton said.<h3>The origin of blue bonds</h3>One of the first blue bond programs was launched with the help of a non-profit organization called The Nature Conservancy to finance conservation efforts in Seychelles. The program used what's called a "debt-for-nature" swap, where a portion of a country's debt is forgiven in exchange for local investments in conservation measures."I give The Nature Conservancy a lot of credit because they created a blue bond program a few years ago that I think really kicked up a lot of interest in the space," Preeti Bhattacharji, JPMorgan's head of sustainable investing, said.The organization is now one of the <a href="https://www.nature.org/en-us/what-we-do/our-insights/perspectives/an-audacious-plan-to-save-the-worlds-oceans/">best-known issuers</a> of blue bonds, Bhattacharji said.Lawton from T Rowe Price added that banks like the Asia Development Bank and the Export-Import Bank of Korea have <a href="https://www.kedglobal.com/banking-finance/newsView/ked202301060002">also issued blue bonds.</a> The funding method is actually gaining a lot of traction in the Asia-Pacific region given the region's dependence on marine resources, with issuance doubling to $1 billion since its debut in 2020, the South China Morning post <a href="https://www.scmp.com/business/banking-finance/article/3234882/blue-bonds-set-make-waves-new-financing-tool-ocean-friendly-projects-asia-pacific-region" target="_blank" rel="noopener">reported</a> in September last year.And more institutions are jumping in. Last August, wind energy company Ørsted became <a href="https://orsted.com/en/media/news/2023/06/20230608684811" target="_blank" rel="noopener">the first energy company to issue a blue bond</a>, worth 100 million euros and maturing in 2028. Mitsui O.S.K Lines, a Japanese shipping company, also announced in December <a href="https://www.ajot.com/news/mol-to-become-worlds-1st-shipping-company-to-issue-blue-bonds" target="_blank" rel="noopener">a 10 billion yen ($66 million) blue bond issuance.</a>While the buy-side enthusiasm is still limited to a relatively small pool of investors, Bhattacharji from JPMorgan said the market has a lot of potential to grow as sustainability becomes a priority for future generations."As younger people come into their wealth, come into their power, enter the space, start asking these questions, the pattern that I've seen — not specific to blue bonds, but across sustainability — is there's just growing, swelling interests across these subjects," she said. "And I don't see any reason blue bonds should be an exception to that."

Blue is the next green: Bonds financing water conservation projects are approaching a 'tipping point'

<ul><li>There is a suggestion to grant tax-free status to annuity income from the <keyword id="20240872" type="General" weightage="20" keywordseo="national-pension-scheme" source="keywords">National Pension Scheme</keyword> (<keyword id="19919089" type="General" weightage="20" keywordseo="nps" source="keywords">NPS</keyword>). </li><li>There is a proposal to simplify the capital gains <keyword id="6383566" type="General" weightage="20" keywordseo="taxation" source="Orion">taxation</keyword> structure by introducing a uniform holding period across domestic equities and <keyword id="6357979" type="General" weightage="20" keywordseo="mutual-funds" source="Orion">mutual funds</keyword>. </li><li>Providing relief from double taxation on dividends is anticipated to receive positive feedback from the <keyword id="31671" type="General" weightage="20" keywordseo="markets" source="Orion">markets</keyword>. </li></ul>The FY 2025 budget is around the corner and it is expected that Finance Minister Nirmala Sitharaman will fulfil some of the wishes of both the industry and the common people. A report by <keyword id="19908266" type="General" weightage="20" keywordseo="icra" source="keywords">ICRA</keyword> analytics lists down some changes they foresee when it comes to taxation and other investment products. Taxation The persistent call for the removal of the security transaction tax (<keyword id="20204742" type="General" weightage="20" keywordseo="stt" source="keywords">STT</keyword>) in financial markets has gained momentum in recent years, and as GST collections have risen, this demand has once again become a focal point. The potential elimination of STT is seen as a measure to attract more investors to participate in domestic equity markets. Another significant concern in the taxation landscape is the issue of double taxation on dividends. Under the current system, companies pay taxes on their profits, and simultaneously, the government levies additional taxes on dividends in the hands of shareholders. This results in double taxation on dividends. Addressing this issue by providing relief from double taxation on dividends is anticipated to receive positive feedback from the markets. <keyword id="6354432" type="General" weightage="20" keywordseo="pension" source="Orion">Pension</keyword> and <keyword id="35450" type="General" weightage="20" keywordseo="insurance" source="Orion">Insurance</keyword> In the domain of pension and insurance, there is a proposal to raise the minimum pension floor for unorganised sector workers under the Atal Pension Yojana (APY). The rationale behind this proposal is that the current pension amount may not attract enough potential subscribers to enrol in the scheme. Additionally, there is a suggestion to grant tax-free status to annuity income from the National Pension Scheme (NPS). This move is particularly crucial as senior citizens heavily rely on annuity income during their retirement years. Considering the rise in medical expenses and the financial well-being of senior citizens, providing tax-free status to annuity income is seen as a step towards supporting this demographic. Further, proposing a distinct tax deduction for life insurance premiums, separate from Section 80C, could boost the adoption of insurance products, encouraging people to secure their family's financial future through life insurance investments. Furthermore, there is a recommendation for the government to review the 18% Goods and Services Tax (GST) imposed on health insurance policies. Markets In the financial markets, one of the pressing issues is the need for a comprehensive policy on cryptocurrency regulation. With the rising popularity and usage of cryptocurrencies, a regulatory framework is considered essential to ensure orderly and secure participation in the crypto market. Another area of interest is the potential reintroduction of sovereign green bonds in the budget. Sovereign green bonds play a crucial role in addressing the funding requirements for sectors like wind, power, and hydropower, promoting sustainable investments. Additionally, there is speculation about the allocation of a significant capital outlay for an Energy Transition Fund. The focus of this fund would be on new-age fuels such as green hydrogen, ethanol, and other biofuels, aligning with the government's emphasis on energy transition and net-zero objectives. Mutual Funds Within the mutual funds sector, there are several proposals to address taxation-related disparities and encourage a more investor-friendly environment. There is a call for parity in taxation between equity mutual funds and Unit Linked Insurance Plans (ULIPs). Achieving parity between equity Fund of Fund and equity-oriented mutual funds for taxation is also under consideration. Furthermore, there is a proposal to simplify the capital gains taxation structure by introducing a uniform holding period across domestic equities and mutual funds. This move is expected to enhance compliance and streamline the tax treatment for investors. Lastly, there is a suggestion to revisit the tax changes introduced for debt funds last year. The amendment, while creating a level playing field between bank deposits and debt mutual funds, inadvertently affected certain categories of funds. However, a depositor in fixed deposits secures guaranteed returns regardless of fluctuations in interest rates, whereas an investor in debt funds is susceptible to both interest rate fluctuations and credit risk in the event of issuer defaults. Moreover, the elimination of the previous indexation benefit adversely impacted the tax-friendliness of global equity funds, equity fund of funds, gold funds, and hybrid funds with less than 35% equity exposure. Consequently, there is a possibility of revisiting the tax changes to address these issues. This revision aims to address unintended consequences and restore a tax-friendly environment for investors.

Budget 2024 expectations: From removal of security transaction tax to sovereign green bonds

<ul class="summary-list"><li>The Fed has a strong case to lower interest rates, according to BlackRock's Rick Rieder.</li><li>The bond chief said high rates may stoke inflation, as the economy has shifted to being a net creditor.</li></ul>It might sound counterintuitive, but the Federal Reserve should cut rates to tackle inflation. In an interview with Bloomberg TV, BlackRock's bond chief Rick Rieder argued that the Fed needs to loosen monetary policy before inflation falls. That's partly because high interest rates may actually be stoking inflation, thanks to the huge transfer of money in the economy from borrowers to lender, Rieder said. Cash in the economy has shifted from the public sector to the private sector, which is a net creditor, Rieder said. That means those companies — and the middle- to high-income workers at those firms – are actually benefitting from high interest rates, as they're benefiting from interest payments.In theory, that could raise spending among middle- to high-income consumers, raising prices throughout the economy."I'm not certain that raising interest rates actually brings down inflation. In fact, I would lay out an argument that actually, if you cut interest rates, you bring down inflation," Rieder said. Others on Wall Street have made that argument despite it going against conventional wisdom. High interest rates could also be responsible for <a href="https://www.businessinsider.com/fed-must-cut-interest-rates-to-lower-inflation-jpmorgan-2024-4#:~:text=If%20the%20Federal%20Reserve%20wants,interest%20rates%2C%22%20Manley%20said.">keeping shelter costs elevated</a>, JPMorgan strategists recently said, suggesting that rate cuts were needed for any "meaningful downward pressure" on shelter inflation, which has been a big input into the elevated consumer price index readings in recent months. Inflation has come down dramatically from its peak, another reason rate cuts are in order, Rieder added. Central bankers have raised rates 525 basis points since March 2022, and the <a href="https://www.businessinsider.com/fed-first-rate-cut-outlook-june-inflation-data-pce-index-2024-3#:~:text=On%20an%20annual%20basis%2C%20the,%25%20year%2Dover%2Dyear.">Fed's preferred inflation gauge</a> clocked in at 2.5% in March, close to its official 2% target.The economy also looks pretty stable, another green light for the Fed to pivot from its restrictive policy, Rieder said."As long as you're price-stable, employing a lot of people, growing the size of the workforce, and moderating a little bit on the growth side, it's pretty good," he added of the economy.Yet, Fed officials have suggested interest rates are staying higher for longer, and markets have already dialed back their expectations for rate cuts this year. Investors see just one to three rate cuts by December, according to the <a href="https://www.cmegroup.com/markets/interest-rates/cme-fedwatch-tool.html?redirect=/trading/interest-rates/countdown-to-fomc.html">CME FedWatch tool</a>, down from as many as seven expected at the beginning of the year.

Why the Fed may want to cut rates to tame inflation, according to BlackRock's bond chief

<keyword id="13265066" type="General" weightage="80" keywordseo="sovereign-green-bonds" source="Orion">Sovereign Green Bonds</keyword> are likely to be issued during the January-March period of the current fiscal, Minister of State for Finance <keyword id="2528510" type="General" weightage="80" keywordseo="pankaj-chaudhary" source="Orion">Pankaj Chaudhary</keyword> said on Tuesday. The objective of Sovereign Green Bonds is to mobilize resources for green infrastructure as part of the government's overall market borrowings in 2022-23, he said in a written reply in the Rajya Sabha. "The framework for these bonds has been brought out. The bonds are likely to be issued from January to March 2023. The proceeds will be deployed in public sector projects which help in reducing carbon intensity of the economy," he said. Replying to another question, he said the value of the Indian rupee is market-determined. As global spillovers from geo-political tensions and aggressive monetary policy tightening across the world intensified alongside a surge in crude oil prices, the US dollar strengthened by 7.8 per cent in the financial year (till November 30), he said. While the rupee has witnessed a depreciation of 6.9 percent in the current financial year till November 30, 2022, he said, it has performed better than most Asian peer currencies, including the Chinese Renminbi (10.6 percent), Indonesian Rupiah (8.7 percent), Philippine Peso (8.5 percent), South Korean Won (8.1 percent), Taiwanese Dollar (7.3 percent) etc during the financial year. The <keyword id="6354335" type="General" weightage="50" keywordseo="reserve-bank-of-india" source="Orion">Reserve Bank of India</keyword> (<keyword id="30067" type="General" weightage="80" keywordseo="rbi" source="Orion">RBI</keyword>) closely monitors the foreign exchange markets and intervenes only to maintain orderly market conditions by containing excessive volatility in the exchange rate, without reference to any pre-determined target level or band. The RBI had announced various measures in the recent period to diversify and expand the sources of forex funding to mitigate exchange rate volatility and dampen global spillovers. Replying to another question, Chaudhary said the total number of counterfeit currency notes detected in the banking system for 2021-22 stands at 2,30,971 pieces as per RBI. As regarding seizures, he said, the <keyword id="91016" type="General" weightage="50" keywordseo="national-crime-records-bureau" source="Orion">National Crime Records Bureau</keyword> (NCRB) is the nodal agency, which compiles the data on crimes including the fake currency notes as reported to it by the States and the Union Territories, and publishes the same in its annual publication 'Crime in India'. SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/tech/apps/news/upcoming-twitter-new-features-in-2023/articleshow/96195337.cms">From Twitter Blue checkmark to videos, a look at the new Twitter features Musk may introduce in 2023</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/business/corporates/news/goldman-sachs-is-reportedly-planning-to-lay-off-hundreds-of-employees-in-consumer-business/articleshow/96193786.cms">Goldman Sachs is reportedly planning to lay off hundreds of employees in consumer business</a>

You Searched For "green bond" and got 11 results

Green Bonds and Investment Performance

SEBI proposes expansion of sustainable financial framework in securities market

PTI

Raising massive financial resources for net-zero goal unprecedented challenge: Economic Survey

PTI

On the right track — Economic Survey 2023-24 outlines India’s commendable climate action

Ankush Banerjee

The power of passions: Tapping into consumers' emotional bonds

Raja Rajamannar

Green Bonds and Sustainable Finance

What habits do the world's oldest people have that help them live so long and healthily?

BI India Bureau

Blue is the next green: Bonds financing water conservation projects are approaching a 'tipping point'

Aruni Soni

Budget 2024 expectations: From removal of security transaction tax to sovereign green bonds

Anagh Pal

Why the Fed may want to cut rates to tame inflation, according to BlackRock's bond chief

Jennifer Sor

Govt likely to issue green bonds in Jan-March quarter

PTI

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