Landers are increasing efforts to achieve sustainable development objectives, with capital -oriented capital, education and essential infrastructure.
The major world banks and financial institutions increase their participation in the market for social obligations, strengthening the role of debt capital in the resolution of social challenges around the world.
Standard Charterd recently announced the issue of its first social security of $ 1.1 billion. The product is mainly reserved to facilitate loans to small and medium -sized enterprises (SMEs), including support for companies belonging to women. Funds will also be allocated to health care, education, infrastructure development and food security initiatives.
The transaction is aligned with the framework of the obligations of sustainability of the bank, which applies environmental and social standards in the sensitive sectors. For example, financial services are only extended to customers committed to reducing the addiction to thermal coal to less than 5% of income by 2030.
In 2024, the Deutsche Bank issued its first social obligation, raising 500 million euros to extend its pool of sustainable assets. The product will finance affordable housing and essential services for elderly populations.
In January, the International Finance Corporation, which is part of the World Bank group, raised $ 2 billion thanks to its greatest social obligation. Funds aim to support low -income communities in emerging markets.
Social ties are structured in a similar way to conventional fixed income instruments in terms of risk and yield. The key distinction lies in the requirement of legal documentation specifying how the product will be allocated, ensuring transparency and responsibility.
“The increase in the issue of social ties is aligned with the societal objectives of public and private entities,” explains Conor Moore, world chief of KPMG Private Enterprise. “Although there are reflux and flows in the political environment around sustainability initiatives, this will remain a priority for many institutions. This should lead to other emissions in various regions and sectors. ”
Mike Hayes, world leader in climate change and decarbonization of KPMG, adds: “It should be noted that if most of the world’s investment will be directed to energy and sustainable infrastructure, many of these projects involve a critical social dimension – considered as simple transition.”
“In other words, unless social problems such as community membership and employees are discussed, projects should not go ahead. This is an important role that social obligations can play in supporting the investment of infrastructure. ”
According to the UN Financing of the 2024 sustainable development reportThe global funding for sustainable development remains large – estimated at 4 dollars per year. Although social ties can help fill a part of this deficit, they are unlikely to close it entirely.