A rush to sell at least $10 billion in bonds in response to the coronavirus crisis is shaking up the green-heavy
Issuance of social and sustainable bonds has jumped as borrowers including the
“The present crisis is going to power the concept of sustainability and social bonds,” said
EIB reports on individual projects funded by its sustainability bonds, such as the number of people helped, and Romani said that there is need for “quick progress” on the European Union’s sustainability bond taxonomy to help boost transparency across the market. Global development banks have sold social bonds -- used to fund projects with positive social outcomes -- to support billions of Covid-19 response pledges including beefed-up medical provisions or loans to companies forced to close their doors.
“Now that we have a pandemic, it is a very concrete issue that social bonds can help address,” said
HSBC worked on a 1 billion-euro social bond sale by
Even with the rush of deals, the social and sustainability bond market is dwarfed by the green market, which is more established and used by companies and governments in additional to development banks. Global first-quarter sales of the two note types totaled about $20 billion, less than half the size of the green bond issuance, according to data compiled by
Still, greater transparency has boosted the appeal of social bonds to investor seeking to make impact in addition to a financial return, according to HSBC’s Bidgoli.
“Our syndicate team has seen stronger demand for social and sustainability bonds than for conventional bonds” she said. “There is appetite out there.”
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