The WA Government says it will raise billions in debt in environmental and social-friendly markets.

WA is seeking to counter criticism that it is a major source of global pollution by diving into green finance markets. 

Sweden's central bank last year offloaded all its WA government bonds due to Australia’s climate policies. The state has since sought to make its debt seem more environmentally sustainable.

WA’s Premier and Treasurer, Mark McGowan, says he is looking at issuing “green” and “sustainable” bonds to the world's financial markets so that WA can reach net zero by 2050.

Governments use bonds to raise funds for their activities. WA is taking on environmental, social and governance (ESG) financing following similar moves by New South Wales, Victoria and Queensland.

However, in this case, the type of bonds that the Premier outlined have been seen as an attempt to greenwash the state’s heavy reliance on the mining and resources industry and support for carbon-intensive projects.

The money will allegedly pay for spending on public transport assets, solar panels on social housing, pine plantation recycling initiatives and many more. 

The decision comes at a time of extraordinary growth in the sustainable bond market, which has risen from negligible levels just five years ago to be worth an expected $1 trillion in 2021.

The green bond market requires the use of rigorous reporting and auditing processes, in which borrowers show specifically how they are spending money.

Additionally, investors in ESG markets often demand a high level of transparency to ensure money they lend goes to specific assets or programs. Also, ESG markets allow funding to be withdrawn if a borrower does not meet key conditions.

The WA Greens say the Premier’s attempt to claim green credentials will be seen as contradictory to the state’s rising carbon emissions.