Fixed Income Commentary | GSSS Bonds …..More Than Just a Bond

Following an increasing awareness of global warming and its consequences, several organizations and governments are developing strategies to protect the world’s climate. In 2015, all the member states of the United Nations (UN) adopted a 2030 agenda for sustainable development and to confront climate change. This created a huge window of opportunity for increasing climate-smart investments, which are essential to combating this global challenge. The achievement of these goals is hinged on adequate financing, hence the development of targeted investments such as the Green, Social, Sustainable, and Sustainability-Linked (GSSS) bonds. GSSS bonds are pivotal to the achievement of a country’s sustainable development goals as it poses an opportunity to raise debt at a lower cost. GSSS bonds provide an alluring-investment plan with an opportunity to finance climate-related projects.

In this report, we assessed historical trends and the performance of the GSSS bonds, walked through the regulations and criteria for issuing the bond, and highlighted opportunities for issuers/investors and the role of Meristem.