NEW Whitepaper

Social Bonds: A significant financing opportunity amid the pandemic

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The global spread of COVID-19 has led to an increased appetite among bond investors for responsible investment options, with governments around the world rolling out unprecedented stimulus packages, thus further providing support to investors. Precipitated by the pandemic, investors are changing their outlook over the percentage of proceeds used to finance new projects and have identified a significant opportunity by committing to social projects and initiatives. The attached note explains the growth in social bonds volume during the year, and why we think financing through social bonds is set to become the next growth frontier for investment banks.

Key Takeaways
  • In the coming months, we expect social bonds market to emerge at the fastest pace, which would take the total share to beyond the current c.24% of total ESG volume (c. USD52bn)
  • Economists agree that the pandemic has caused a huge shakeup in financial system and has acted as a big stimulus for Social Bonds
  • orporations and financial institutions will become more active in the social bond market as the pandemic accelerates private issuers' interest in social considerations
  • We see a strong case for funds to be directed towards social investments, however we are yet to see how the balance between green and social investments continue in the market