A new partnership to drive the development of low carbon finance and help address sustainability and climate challenges has been announced.

The Climate Bonds Initiative (CBI) and the World Council for Sustainable Development (WBCSD) have signed a Memorandum of Understanding (MoU) to work together on the development of the corporate green bond market.

They consider the market is still relatively small. In 2015, businesses issued $13.6 billion (£9.8bn) compared to overall green bond issuance during the year of around $41.8 billion (£30bn).

The organisations believe the corporate market will gain further scale once the benefits of green bonds are better understood.

They add developing “robust, liquid and transparent” green bond markets will help drive down the cost of low carbon projects across established and emerging economies.

Sean Kidney, CEO of CBI said: “This partnership presents a significant opportunity to drive the development of corporate green bonds to help address worldwide sustainability and climate challenges.

“The MoU provides a substantive foundation for co-operative projects to mobilise the finance sector in the development of green finance solutions that support the low carbon business and economic transition.”