Wednesday 28 March 2018

Why are investors looking at social bonds? With payoffs indexed to social outcomes, issuers such as Social Finance US look to tap into investor appetite.


Building on the tremendous momentum following the successful issuance of green bonds and green loans over the past few years, investors are becoming increasingly comfortable with socially meaningful forms of outcome-based financing.

In that spirit the success of programmes like those promoted by Social Finance US is a testimony to this trend. Focusing on financing programmes aimed at fostering reduction of drug use, better children care and enhancing foster care placements, it offers investors the option to subscribe to social bonds with a payoff indexed to better social outcomes for the targeted populations. As a key partner of the programme, BNP Paribas played a vital role in ensuring a successful road to market for the project.

Social bonds have slowly gained momentum. In bringing financial incentives to the world of public policies and charities, they introduce an element of quantification to outcomes, which is helping to nurture more incentive-based behaviour. More importantly it shows that impact investing of this kind mostly works and achieves its goals.  



Rate this article :
2
0
0
 
 

Give us your feedback

Please validate CAPTCHA.

RELATED ARTICLES
come-with-the-wind-taiwan-leads-asia-s-shift-to-a-low-carbon-economy

Taiwan's first-ever offshore wind farm is garnering great interest in green energy and paves the way for similar projects across Asia Pacific. What is driving demand, what sort of financing is required and how do they become commercially viable?

esg-global-survey-2019-investing-with-purpose-for-performance
Our latest survey reveals a stronger commitment to integrating ESG in investment decisions since 2017...
Our latest survey reveals a stronger commitment to integrating ESG in investment decisions since 2017...
the-business-case-for-sustainable-finance
Should sustainable finance not just be business as usual? In India, business and development leaders...
Should sustainable finance not just be business as usual? In India, business and development leaders discuss the question...
south-korea-ups-its-sustainability-drive
Korea is championing low-carbon development in Asia Pacific, with strong support from the government...
Korea is championing low-carbon development in Asia Pacific, with strong support from the government and regulators...
the-future-of-investing-are-the-un-sdgs-the-new-investor-compass-
BNP Paribas' ESG Global Survey reveals a rapid shift to ESG integration as investors increasingly embrace...
BNP Paribas' ESG Global Survey reveals a rapid shift to ESG integration as investors increasingly embrace the United Nations...
close
{POPUP_CONTENT}