Leading organization are looking beyond the impact they create from an economical point of view l and are placing an emphasize on the social causes their business impacts. As a result, sustainable finance projects with positive social outcomes have experienced rapid growth amongst the bond investor community as well as an overall increase in interest from issuers.
Social bonds can be used to finance both public and private demand to create positive social outcomes in communities.
Learn more about Sustainalytics’ social bond second-party opinion service.
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Overview of Our Social Bond Service
An SPO from Sustainalytics on your social bond framework will give investors and the market the assurance that your bond is credible by assessing your social bond framework to ensure eligible projects are aligned to the Social Bond Principals (SBP). Common categories of eligible social bond projects that we assess include but are not limited to providing and promoting:
Basic infrastructure such as clean drinking water, sanitation and energy.
Access to essential services such as healthcare and education.
Access to affordable housing.
Job creation and employment generation.
Availability and Food Security.
Socio-economic advancement and empowerment.
Contact our expert team to discuss how our leading second-party opinion service can help your social bond issuance.
Key Benefits
Enhance Awareness of Social Issues
Issuers can highlight their work in addressing social goals to investors and other stakeholders.
Meet Growing Investor Demand
As the importance for addressing social issues grows, an increasing number of investors are investing in social conscious companies
Gain Investor Confidence
An SPO from a trusted ESG ratings provider, like Sustainalytics, provides additional assurance on the credibility of the issuer and the issuance.
Diversify Issuer Investor Base
The demand for social bonds has significantly increased and these types of bonds tend to be oversubscribed.
Meet Market Expectations
An SPO assesses the alignment of the bond’s framework with recognized International Capital Market Association’s (ICMA) Principles.
Assess the Use of Proceeds
An SPO assesses the impact of projects to be financed with the social bond’s proceeds.
Enhance Your Bond Framework
Annual Review
Issuers are continuously under pressure by investors and the market to ensure their bond framework is aligned well past the issuance process. With our Annual Review service, we work with issuers post issuance to ensure that the projects financed and the reporting are aligned with the intended use of proceeds and commitments set out in the bond framework.
Projects are aligned to the eligibility criterial in your framework.
You are reporting on impact metrics as outlined in your framework.
Allocation processes and reporting are as outlined in the bond framework.
Climate Bond Verification
Leading companies are examining their climate-related business risks as well as their role in climate change mitigation. Climate bonds are used to finance projects that address climate change and are aligned with achieving the goals of the Paris Agreement. As a Climate Bonds Standard Board approved external reviewer, Sustainalytics has completed more climate bond verifications than any other external reviewer in the market for 2020
Pre-issuance verification:
Verify that projects and assets are eligible under relevant sector eligibility criteria and that internal processes and controls exist to manage bond proceeds
Post-issuance verification:
Through our assessment, provides issuers with a report stating whether the bond meets the Climate Bonds Standard’s post-issuance requirements
Ongoing verification:
Issuers must annually report on their bond to comply with the Climate Bonds Standard’s post-issuance requirements to maintain a bond’s certification.
EU Taxonomy
Sustainalytics offers issuers the ability to include in its second-party Opinion an additional assessment that aligns the issuer’s bond or loan framework with the EU Taxonomy. Adding the EU Taxonomy to a second-party opinion
assures the market and investors that the bond or loan framework is aligned to the EU’s six environmental objectives, giving confidence and reputability during issuance.
Sustainalytics’ assessment considers the following general requirements for a bond framework’s alignment with the EU taxonomy:
Why Sustainalytics?
A Single Market Standard
Consistent approach to ESG assessments across the investment spectrum.
Award-Winning Research and Data
Firm recognized as Best ESG Research and Data Provider by Environmental Finance and Investment Week.
End-to-End ESG Solutions
ESG products and services that serve the entire investment value chain.
25+ Years ESG Expertise
350+ ESG research analysts across our global offices.
Largest Second-Party Opinion Provider
As recognized by Environmental Finance and the Climate Bonds Initiative.
Related Insights and Resources
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Read how Nutrien, the world’s largest provider of crop inputs and services, used Sustainalytics' Socio-Economic Impact Report to quantify the social and economic impact of their sustainability efforts, particularly supplier diversity efforts.
Windstream’s Path to Understanding and Communicating its ESG Performance
This Customer Spotlight showcases how Windstream Holdings used insights gained from Sustainalytics’ ESG Risk Ratings and ESG Performance Analytics processes to enhance its ESG profile, expand company ESG initiatives, and improve ESG reporting and disclosures in line with industry leading practices.
Sustainability-Linked Loans 2021: The COVID-19 Effect, ESG Ratings & Continued Popularity
The sustainable finance market has seen an exponential increase in size and activity in recent years. Innovative offerings such as green, social, and sustainable bonds, green and sustainability-linked loans (SLLs), and most recently sustainability-linked bonds, have contributed to the market’s incredible growth. In 2020, boosted by varied financial needs and mainstream recognition of environmental, social and governance (ESG) parameters, global sustainable debt capital surpassed US$700 billion, a 30% increase compared to 2019. Part of this capital was channelled towards tackling the effects of COVID-19 as government agencies, supranational bodies and corporates borrowed money to support areas most affected by the pandemic, such as healthcare. This shift in fund usage in 2020 resulted in the rapid growth of social bonds and a commendable first year for sustainability-linked bonds.
Tracking the Progress on Gender Equality through Sustainable Finance
A key result of achieving UN SDG 5 - Gender Equality is global economic development. However, as women globally were disproportionately impacted by the COVID-19 pandemic, the financing of activities that contribute to the empowerment and socio-economic advancement of women and girls will need to be accelerated to meet the goal by 2030. One option for creating targeted gender investment is the development and issuance of Gender Bonds that specifically support the advancement, empowerment, and equality of women.
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