March 3, 2022

Greening Sovereign Debt Performance

This report sets out the case for moving sovereign debt markets towards the explicit valuation of natural capital, and for greater use of performance-linked instruments to deepen creditor and debtor sharing of associated risks and opportunities. Advancing these two developments would be a much needed and timely development in addressing the short-term debt crisis and long-term, structural sovereign debt challenges, and the urgent need to finance the transition to a net zero, nature positive world.

This paper is aimed at participants active in sovereign debt markets, including issuers and investors. It is also highly relevant to a wider set of policymakers and financial market participants interested in increasing the resilience of financial markets and scaling up sustainable finance.