A review of innovative bond instruments for sustainable development in Asia

Article


Prakash, N. and Sethi, M. 2022. A review of innovative bond instruments for sustainable development in Asia. International Journal of Innovation Science. 14 (3/4), pp. 630-647. https://doi.org/10.1108/IJIS-10-2020-0213
AuthorsPrakash, N. and Sethi, M.
Abstract

Purpose
Advancing the economies in Asia toward meeting sustainable development goals (SDGs) needs an unprecedented investment in people, processes and the planet. The participation of the private sector is necessary to bridge the financing gap to attain this objective. Engaging the private sector can contribute significantly to attaining the 2030 agenda for SD. However, the financial markets in Asian economies are yet to realize this potential. In this context, this paper aims to discuss the state of finance for SD in Asia and identifies innovative financial instruments for attracting private investments for SDs in these economies.

Design/methodology/approach
This study relies on published articles, reports and policy documents on financing mechanisms for SD. The literature review covered journal data sources, reports from global institutions such as the UN, World Bank, International Monetary Fund and think-tanks operating in the field of climate change policies. Though the topic was specific to financial market instruments, a broader search was conducted to understand the different sources of sustainable finance available, particularly in Asia.

Findings
The investments that are required for meeting the SDGs remain underfunded. Though interest in sustainability is growing in the Asian economies, the financial markets are yet to transition to tap the growing interest in sustainable investing among global investors. This paper concludes that to raise capital from private investors the Asian economies should ensure information availability, reduce distortions and unblock regulatory obstacles. It would also need designing policies and introducing blended financing instruments combining private and public funds.

Research limitations/implications
Though the study has grouped Asian economies, the financing strategy for SDGs should be developed at the country-level considering the domestic financial markets, local developmental stage, fiscal capacity and nationally determined contributions. Further research can focus on developing country-specific strategies for using innovative financial instruments.

Originality/value
Mobilizing funds for implementing the 2030 Agenda for SD is a major challenge for Asian economies. The paper is addressed to national policymakers in Asian economies for developing strategies to raise capital for SD through private participation. It provides opportunities for revisiting national approaches to sustainable finance in these economies.

KeywordsGreen bond; Sustainable finance; Green financing; Social bond; Sustainability bond
JournalInternational Journal of Innovation Science
Journal citation14 (3/4), pp. 630-647
ISSN1757-2223
Year2022
PublisherEmerald Publishing
Accepted author manuscript
License
File Access Level
Anyone
Digital Object Identifier (DOI)https://doi.org/10.1108/IJIS-10-2020-0213
Publication dates
Online05 May 2021
Print06 Sep 2021
Publication process dates
Deposited26 Feb 2024
Copyright holder© 2021, The Authors
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