An article on the FTSE Global Markets website outlines how eligibility criteria is being developed by an Agriculture, Forestry and other land use (AFOLU) expert group for assets and projects that can be used to back Climate Bonds.

The expert group includes members from the World Agroforestry Centre as well as numerous other organizations.

Climate Bonds operate like a fair-trade labeling scheme for bonds, making it easier for investors to work out what sorts of investments genuinely contribute to addressing climate change. Having eligibility criteria in place will help reduce the risk of poorly designed projects or projects falsely claiming they are ‘green’.

The United Nations estimates that an additional investment of $14bn by 2030 will be required to cope with the adverse impacts of climate change on AFOLU-sectors.

"There’s an urgent need for investments that help reduce deforestation and help with climate change adaptation in vulnerable agricultural areas,” says Sean Kidney, CEO of the Climate Bonds Initiative. “The right kinds of investment in agriculture also have the potential to help sequester enormous amounts of carbon."

Read the full story: AFOLU sets new eligibility criteria for agri-climate bonds