Creating Green Bond Markets – Insights, Innovations, and Tools from Emerging Markets

This 2018 report by the Climate Bonds Initiative and IFC provides a comprehensive guide for emerging markets to develop green bond markets. It emphasizes the necessity of national guidance to ensure market integrity and alignment with climate goals, while highlighting the success of China's regulatory approach and the innovation of green sukuk in Malaysia and Indonesia. The report introduces a 'Green Bond Market Development Toolkit' to help regulators move from nascent to robust markets through structured milestones and capacity building.

• Green bonds are identified as a critical tool for achieving climate and sustainable development goals (SDGs), offering investors a risk-return profile comparable to traditional bonds while providing transparency on environmental impacts. For issuers, they diversify the investor base and enhance reputation.
• National guidance is essential for emerging market development because it aligns issuances with national climate targets, maintains market integrity to prevent "greenwashing", enables targeted policy support (such as subsidies), and reduces transaction costs to achieve scale.
• Most national and regional green bond frameworks in emerging markets align with or reference international standards, specifically the Green Bond Principles (GBP) and the Climate Bonds Standard. However, a gap remains in the adoption of consistent, tight green definitions, with many countries relying on broad categories.
• China emerged as a global leader in green bond issuance following the 2015 release of mandatory guidelines and a project catalogue by the People’s Bank of China (PBOC). In 2016, China accounted for 39% of global green bond issuance.
• Several Asian markets have implemented financial incentives to lower the entry barrier for green bond issuers. Malaysia and Singapore provide grants to cover external review costs, while China has used interest rate subsidies and included green bonds as eligible collateral for the PBOC's Medium-Term Lending Facility.
• The report highlights the convergence of Islamic finance and green finance, noting that Malaysia and Indonesia have successfully issued green sukuk. Indonesia issued the world's first sovereign green sukuk for US$1.25 billion in February 2018.
• A significant barrier to market growth in emerging economies is the lack of knowledge and capacity among regulators, issuers, and investors. There is a specific need for training in developing green project pipelines and integrating ESG risk management.
• The SBN Green Bond Working Group developed a Market Development Toolkit consisting of four components: Common Objectives (Alignment, Quality, Flexibility, and Harmonization), a Self-Assessment and Planning Matrix, a Roadmap with Common Milestones, and a Capacity Building Needs Assessment.

APA

Climate Bonds Initiative (2018). Creating Green Bond Markets – Insights, Innovations, and Tools from Emerging Markets. https://www.climatebonds.net/files/documents/publications/Creating-Green-Bond-Markets-%E2%80%93-Insights-Innovations-and-Tools-from-Emerging-Markets_2025-02-17-163138_whfe.pdf

Chicago

Climate Bonds Initiative. Creating Green Bond Markets – Insights, Innovations, and Tools from Emerging Markets. 2018. https://www.climatebonds.net/files/documents/publications/Creating-Green-Bond-Markets-%E2%80%93-Insights-Innovations-and-Tools-from-Emerging-Markets_2025-02-17-163138_whfe.pdf.

Wikipedia

{{cite report |author=Climate Bonds Initiative |title=Creating Green Bond Markets – Insights, Innovations, and Tools from Emerging Markets |date=2018 |url=https://www.climatebonds.net/files/documents/publications/Creating-Green-Bond-Markets-%E2%80%93-Insights-Innovations-and-Tools-from-Emerging-Markets_2025-02-17-163138_whfe.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{climatebondsinitiative2018creating, author = {{Climate Bonds Initiative}}, title = {{Creating Green Bond Markets – Insights, Innovations, and Tools from Emerging Markets}}, institution = {Climate Bonds Initiative}, year = {2018}, url = {https://www.climatebonds.net/files/documents/publications/Creating-Green-Bond-Markets-%E2%80%93-Insights-Innovations-and-Tools-from-Emerging-Markets_2025-02-17-163138_whfe.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }