Fiji Green Bond Framework

Introduction

Fiji sees the issuance of Green Bonds as an important tool to finance the transition to a low carbon and climate resilient economy and plans to issue Green Bonds to fund new financing or the re-financing of projects with economic, environmental and societal benefits, with a particular emphasis on the climate and natural environment.

Fiji has retained Sustainalytics to provide a Second Party Opinion to confirm the validity of the Framework. Sustainalytics2 has reviewed Fiji’s Green Bond Framework for its sustainable and green qualities as well as its alignment with the GBP. The objective of the Second Party Opinion is to provide investors with an independent assessment. The Second Party Opinion, as well as the Framework, will be published on the Reserve Bank of Fiji website.

Background

Climate change and climate-induced natural disaster risks constitute two of the greatest barriers to sustainable development as the impacts are widespread and cross-sectoral. Fiji is exposed to large natural risks, especially from floods and tropical cyclones. In the period between 1969 and 2016, the country experienced 63 tropical cyclones and 146 notable floods between 1969 and 2009. In February 2016, a category 5 tropical storm, the strongest ever in the Southern hemisphere, made landfall in Fiji.

Approximately 540,400 people equivalent to 62% of the country’s total population were affected and the country sustained damage amounting to almost a third of its Gross Domestic Product (GDP). Fiji is also at the forefront of large and uncertain long-term threats from climate change, especially from sea level rise and increased intensity of extreme weather events. For example, a coastal community – Vunidogoloa Village – in the Cakaudrove Province in Vanua Levu was relocated due to sea level rise.

There are some communities identified for relocation including a school. Rising sea levels coupled with warmer temperatures and stronger El Niño patterns increase Fiji’s susceptibility to deadly food- and water-borne diseases. Across Fiji’s two main islands, the number of cool nights has decreased and warmer days has increased since 1942. Tropical cyclones are predicted to decrease in frequency and increase in intensity. These changing weather patterns have worsened Fiji’s susceptibility to viral disease outbreaks. Fiji recorded a drought-induced outbreak of diarrheal disease in 2011, combatted a post-flood leptospirosis outbreak in 2012 and quelled a dengue outbreak in 2013.

Changing weather extremes threaten the livelihoods of the Fijian people—implicating Fiji’s ecosystems, on land and at sea. Saltwater intrusion from coastal flooding destroys farmland, disrupting the supply of staples in the Fijian economy and forcing communities to migrate to safer ground. The average asset losses due to tropical cyclones and floods are estimated at more than $500 million per year, representing more than 5% of Fiji’s GDP. Ocean acidification—or carbon pollution that increases the ocean’s acidity—will continue in Fiji, impacting the health of Fiji’s coral reef systems.

Countering the crisis will require collective action from the Fijian Government, the nation’s private sector and the world’s industrialised nations. Fiji remains at the frontline in advocating international policies to counter climate change. But internally, the nation requires technical expertise, human resources and financial capacity to fully implement protective measures. The private sector, other governments and international financial institutions can play key roles in helping Fiji mobilise financing to implement integral climate adaptation measures, as the country relies heavily on its natural resources for economic development, with fisheries, forestry and agriculture its primary industries.

Click here to read the full report from the Fijian Government.