Uncharted waters: where next for blue bonds?

Blue bonds may still be a niche corner of sustainable finance, but industry experts are bullish on their growth potential – even as banks and investors alike retreat on wider sustainability commitments.

An image illustrating the dangers of rising sea levels

Source: ORRAA (Ocean Risk and Resilience Action Alliance), Project Rare

The blue bond market, a subset of green debt where the use of proceeds is earmarked for water and ocean-related projects, grew 10% year-on-year in 2024. Yet, it still only represents around 0.25% of the global sustainable bond market, according to estimates by Markus Müller, Deutsche Bank’s chief investment officer sustainability.

The potential, however, lies in market sizing: water-related investment needs are as vast as the ocean. In utilities alone, research estimates point to US$20 trillion needed by 2050 for water management.

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