Water Infrastructure Criteria of the Climate Bonds Standard

Modern economies are deeply water intensive and water infrastructure is thirsty for investment. Global spending on infrastructure is expected to skyrocket as the world continues to enter an age of unprecedented urbanization and population growth. How can we ensure that funding goes to water-related investments that are resilient, effective, and sustainable over their operational lifetime? And how can we assess credibility in the expanding green bonds market?


Water-related projects are a growing subset of the green bonds market that encourages investments for a low carbon and climate resilient economy. Climate resilient investments in water are desperately needed if sustainable infrastructure is to be achieved.

Fresh, clean water is arguably our most precious resource. Changing precipitation and the reduction in snow and ice are already impacting hydrological systems in many areas of the world. The IPCC warns that the proportion of the global population experiencing water scarcity will increase throughout this century; cities, regions and nations will increasingly have to compete for water.

The Water Infrastructure Criteria, an effort of Climate Bonds Initiative (CBI), is intended to provide investors with verifiable, science-based criteria for evaluating water-related bonds, and to assist issuers in the global corporate, municipal, sovereign and supra-sovereign markets in differentiating their green bond offerings. As part of CBI's broader Climate Bonds Standard and Certification Scheme, these criteria lay out the requirements that water infrastructure assets and/or projects must meet to be eligible for inclusion in a Certified Climate Bond.

The Water Infrastructure Criteria ensure that labeled green bonds for a wide variety of water-related projects and assets are held to common standards of robust, low-carbon and climate resilient water management. All water-related projects and assets that are certified under the Criteria should continue to bring environmental and climate benefits over the operational lifetime of the project.

The Water Infrastructure Criteria have been developed in two phases. Phase 1 Criteria cover engineered water infrastructure and Phase 2 Criteria covers nature-based and hybrid water infrastructure for such purposes as water collection, storage, treatment and distribution, flood protection and drought resilience. Phase 1 Criteria were released to the market in October 2016. These two phases now form the whole Criteria and there is no division between the two.


The Water Infrastructure Criteria can be used to evaluate projects as diverse as industrial water efficiency, reuse, catchment or watershed restoration and or large-scale water supply infrastructure development. In addition, they also cover hybrid ("green-gray") and nature-based water infrastructure. Like normal bonds, water climate bonds can be issued by governments, municipalities, multinational banks or corporations. As an example, water climate bonds can be used for energy or industrial water efficiency projects reuse, catchment or watershed restoration and/or large-scale water supply infrastructure development.

The document provides the necessary methodology and process to evaluate a project’s likely compatibility with the Water Climate Bonds Standard, whether you are a project sponsor, an underwriter, an auditor or a bond investor.

These Criteria should be recognized as a starting point and can be supplemented by other relevant standards that cover areas such as stakeholder engagement, social or human rights. We emphasize that the proposed criteria are provisional and may be adapted either due to public feedback or future developments in the water sector.


Most of the green bonds issued to date have been for the purposes of climate mitigation—the reduction or avoidance of GHG emissions. Energy production, reduced energy consumption, and carbon storage and sequestration are all climate mitigation projects.

Climate adaptation projects are focused on addressing existing or projected climate impacts, such as increasingly severe droughts and floods.

Water projects and assets offer the potential to invest in both climate mitigation and adaptation projects to climate change, where in some cases both mitigation and adaptation are relevant to a single project. These categories are not mutually exclusive and projects may be assessed under both climate mitigation and climate adaption themes.

About the Knowledge Platform

The Knowledge Platform is designed to promote and showcase an emerging set of approaches to water resources management that address climate change and other uncertainties — increasing the use of "bottom-up approaches" through building capacity towards implementation, informing relevant parties, engaging in discussion, and creating new networks. This is an ongoing project of the Alliance for Global Water Adaptation (AGWA) funded by the World Bank Group.

Contact AGWA

Alliance for Global Water Adaptation
7640 NW Hoodview Cir.
Corvallis, Oregon 97330

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