The Mexican Stock Exchange (BMV) announced the launch of sustainability-linked bonds, a new instrument through which companies will be able to finance a project or plans that are focused on meeting positive environmental, social and governance (ESG) goals.
The bonds, which will be identified in the series with the letter “L”, come as a new investment option for market participants committed to sustainability, where targets will be set based on criteria issued by the International Capital Market Association (ICMA). Through the new vehicle, issuers will allocate the resources raised to a general objective, not necessarily to a particular green or social project.
The new bonds join other “thematic debt” alternatives already issued in Mexico, mainly by companies and development banks, such as green bonds, social bonds and sustainable bonds. Last year, five labelled bonds were issued on the BMV, for a total amount of 17 billion pesos. So far in 2021, four companies have listed green bonds for an amount of 8.5 billion pesos, according to information from the Mexican Stock Exchange.
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