The growing significance of sustainability in finance stems from the pressing environmental and social issues the world faces today. Climate change, resource depletion, and social inequality pose significant threats to the global economy, and prioritizing sustainability allows financial institutions to address these challenges and contribute to a more sustainable and equitable future.
Moreover, investing in sustainable instruments not only aligns with consumer and investor preferences for greener, socially responsible options but also generates positive financial returns. Today, governments, financial institutions, and private investors are increasingly offering financial support in the form of grants, loans, and investments to drive the transition toward a more sustainable world while benefiting investors.
Sustainable instruments
In 2022, the Philippines-based BDO Unibank issued the first blue bond in the Philippines and Southeast Asia amounting to $100M through an investment from the IFC.
BDO Unibank’s blue bond has financed water and wastewater management projects including wastewater treatment, bulk water and operations management, and bulk water distribution facilities, ensuring a positive climate impact.
With the Philippines experiencing a critical water shortage, the bond has financed projects that aim to provide solutions to a systematic issue, ensure the availability of water resources, and prevent ocean pollution for future generations.
Additionally, water management in the country has further improved through the introduction of technologies that have helped reduce non-revenue water (NRW) levels and develop sustainable water supply infrastructure, rainwater harvesting, and surface water utilization.
All these efforts have helped increase clean water supply while avoiding groundwater extraction in the country.
Better facilities
Proceeds from BDO Unibank’s blue bond have enabled the installation of a new wastewater treatment plant in Tarlac, a large and densely populated province near the Bangut and Tarlac rivers in the Philippines. This has allowed for the expansion of wastewater management services to an additional 121 businesses and 23 hospitals in the province. By-products from the wastewater treatment plant are also being reused to streamline other plant processes.
For instance, the steam produced is being reused in the physicochemical treatment plant and the ash is used to make pavers, bricks and fence posts. Meanwhile, further investments have been made in installing thermal oxidation/incineration technology at the plant, which results in energy and heat recovery from the thermal oxidation of wastewater solids.
The heat recovered from this is used as an additional source of energy to power the plant’s lamp posts and light fixtures.