RIO DE JANEIRO, BRAZIL - Though their purpose may vary, these bonds share similar characteristics. A company or government takes on debt, and these funds must be used exclusively to meet a specific environmental or social goal, such as developing clean transport infrastructure, expanding renewable energy or meeting the Sustainable Development Goals.
However, with the growth of sustainable finance, new and even more innovative types of debt instruments have emerged, such as one now proposed by Uruguay. The government of President Luis Lacalle Pou is working on a bond whose funds will not be designated for a specific purpose, but will . . .