Is blue the new green?
Euromoney, is part of the Delinian Group, Delinian Limited, 4 Bouverie Street, London, EC4Y 8AX, Registered in England & Wales, Company number 00954730
Copyright © Delinian Limited and its affiliated companies 2024
Accessibility | Terms of Use | Privacy Policy | Modern Slavery Statement
Sponsored Content

Is blue the new green?

Sponsored by


How blue financing can support the fight against climate change



Daniel Hanna
Global head of sustainable finance,
Standard Chartered

The International Energy Agency estimates that $53 trillion is needed to achieve the Paris Agreement and keep global warming below 2 degrees. A separate analysis suggests that $5-7 trillion is required to meet the United Nations Sustainable Development Goals by 2030. While advanced economies are close to meeting these requirements, there is a funding gap of around $2.5 trillion in emerging and developing countries, with $1.3 trillion of that in Africa alone.

Can finance be part of the solution? I believe it can. 

Impact investing is on the up – but more is needed

There are encouraging signs that private finance is responding. Already, one in every four dollars invested globally takes into consideration some form of environmental, social or governance filter. This ’responsible’ kind of investment is growing at 12% per annum in Europe, according to Global Sustainable Investment Alliance, far outstripping the 3% annual growth of conventional investment.

We have also seen the development of new products like green bonds or green loans channelling capital into climate-related projects. From the very first climate bond just over 10 years ago, green bond issuances reached a record $167 billion in 2018, according to Climate Bond Initiative.

However, much more needs to be done. While we can point to some progress around ‘green’ finance issues on land, much less progress has been made on other climate-related matters. Take the ocean. It absorbs 25% of all CO2 emissions and it generates 50% of the world’s oxygen. Yet the ocean and coastal areas face a worrying set of environmental threats, whether from climate change, rising sea levels, or over-exploitation and pollution.

The global cost of rising sea levels is estimated to be $14 trillion per year by 2100, according to the UK National Oceanography Centre, and many of the threats are concentrated in Asia, Africa and the Middle East. China is likely to face costs running into the hundreds of billions of dollars, while higher sea levels present an existential threat to small island nations in the Pacific and Indian oceans. For countries like Kuwait and the UAE, the threat could impact up to 24% and 9% of their GDP respectively.

Africa is also vulnerable, with at least 19 coastal cities with populations of more than 1 million at risk. Some coastal communities in sub-Saharan Africa are already being washed away, with some locations losing up to 30 metres of land each year.

Blue bonds for a blue economy

To combat these threats to the oceans and communities, we must learn from the success of green finance and capitalize on the growing awareness among the public and investors to catalyse ‘blue’ and other sustainable financing. I believe a collective effort is needed around three ‘Ps’ – partnerships, platforms and products.

Creating a sustainable blue economy requires collaboration across the public and private sector. Both sides have key roles to play in creating sustainable finance solutions. The public sector is best placed to ensure a good regulatory and business environment and to help tackle risks that are difficult to quantify or forecast; while the private sector can often bring additional financing capacity, technology and implementation expertise. Solutions such as blended finance – when public money is used to spur private investment into sustainable projects – can and must play an important role.

Private investors also prefer platforms that channel financing in a scalable manner. Standalone projects can help deal with specific challenges, but to turn millions of dollars of investment into billions, credible defined platforms become important.

A number of frameworks have successfully emerged in green financing – for example, the Climate Bond Initiative or Green Bond and Loan Principles – and we are beginning to see the emergence of frameworks in other sustainable areas such as the European Commission’s Sustainable Blue Economy Finance Principles and the WWF’s Blue Finance Principles. The next step is to turn these into investable platforms, such as the World Bank’s Scaling Solar programme, which aims to create viable markets for solar power.

Lastly, investors require standardized, comparable, liquid products to be able to buy and sell, as they already do in green bonds. The first blue bond issue took place last year when the Republic of Seychelles, supported by the World Bank and Standard Chartered, raised $15 million from impact investors to finance the expansion and transition of its marine protected areas, improve governance of priority fisheries and develop its blue economy. It was a small issue, but its success has attracted widespread interest from international investors and regulators.

The prize is substantial

We are now working with a number of stakeholders to develop Blue Bond Principles to help further catalyse the blue bond market leveraging the work on green bonds by the International Capital Markets Association, Climate Bond Initiative and others.

The vision of all of us active in sustainable finance is to bring together both the private and public sector to replicate the successes we have seen in, for example, green bonds to help tackle areas such as blue finance. The prize is a substantial one: filling the finance gap where it is needed most, while also providing sustainable returns to investors, so that finance can be part of the solution to put the world’s economy on a more sustainable footing.


About the Author


Daniel Hanna, Global head of sustainable finance, Standard Chartered
Based in London, Daniel's responsibilities include the Bank-wide Sustainable Finance strategy, developing new products and solutions, further incorporating environmental, social and governance considerations into banking decisions, and identifying sustainable finance opportunities for clients. His responsibilities also include the Bank's Environmental and Social Risk Management team. Daniel is a member of the Sustainable Development Investment Partnership and the City of London Sustainable Development Capital Initiative steering groups. He also established and ran the UK India CEO Forum under the sponsorship of Prime Ministers David Cameron and Manmohan Singh, and previously worked as a visiting Fellow for Chatham House and the President of the European Parliament. He has a Masters in Business Administration from London Business School, a Certificate d’Etudes European from Science Po Strasbourg and a BA in economics and politics from Exeter University.



This material has been prepared by Standard Chartered Bank (SCB), a firm authorised by the United Kingdom’s Prudential Regulation Authority and regulated by the United Kingdom’s Financial Conduct Authority and Prudential Regulation Authority. It is not independent research material. This material has been produced for information and discussion purposes only and does not constitute advice or an invitation or recommendation to enter into any transaction.

Some of the information appearing herein may have been obtained from public sources and while SCB believes such information to be reliable, it has not been independently verified by SCB. Information contained herein is subject to change without notice. Any opinions or views of third parties expressed in this material are those of the third parties identified, and not of SCB or its affiliates.

SCB does not provide accounting, legal, regulatory or tax advice. This material does not provide any investment advice. While all reasonable care has been taken in preparing this material, SCB and its affiliates make no representation or warranty as to its accuracy or completeness, and no responsibility or liability is accepted for any errors of fact, omission or for any opinion expressed herein. You are advised to exercise your own independent judgment (with the advice of your professional advisers as necessary) with respect to the risks and consequences of any matter contained herein. SCB and its affiliates expressly disclaim any liability and responsibility for any damage or losses you may suffer from your use of or reliance on this material.

SCB or its affiliates may not have the necessary licenses to provide services or offer products in all countries or such provision of services or offering of products may be subject to the regulatory requirements of each jurisdiction. This material is not for distribution to any person to which, or any jurisdiction in which, its distribution would be prohibited.

You may wish to refer to the incorporation details of Standard Chartered PLC, Standard Chartered Bank and their subsidiaries at

© Copyright 2019 Standard Chartered Bank. All rights reserved. All copyrights subsisting and arising out of these materials belong to Standard Chartered Bank and may not be reproduced, distributed, amended, modified, adapted, transmitted in any form, or translated in any way without the prior written consent of Standard Chartered Bank.

Gift this article