The Palgrave Handbook of Sustainable Finance

Within the impact investing family, blue bonds are one of the most recent examples of an investment structure developed to specifically direct resources towards sustainable projects. While up to now blue bond have mainly been issued by governments or developments banks, corporate issues are now expected to grow, also due to the interest shown by international organization and asset managers who have announced plans to create global blue bond strategy to increase access to finance for blue projects in emerging markets and help improve market standards for the emerging blue bond market. In this context, an efficient legal framework, capable of ensuring the confidence of market players, can foster the development of a private blue bond market, attracting new investments for projects and actors dedicated to ocean and marine resources conservation. The chapter analyses market practices and international guidelines to isolate the main characteristics of blue bond issues, and identify their main weaknesses and corresponding negotiating and regulatory tools to mitigate them. The EU legal system, in particular, serves as a successful example. Despite the lack of a regulatory framework specifically dedicated to blue bonds, applicable rules can be identified from a systematic analysis of the EU legal framework, and in particular the recent regulation on EU green bonds (Reg. EU 2023/2631) and the so-called Taxonomy regulation (Reg. EU 2020/852), whose objective number 3 focuses specifically on the sustainable use and protection of water and marine resources.