Gender-related bond issues to grow: Moody’s

The issuance of sustainable bonds that seek to improve gender equality is expected to rise this year, finds Moody’s Investors Service.

In a report, the rating agency said sustainable bonds that finance projects tied to gender equality and the empowerment of women jumped by 53% last year to US$49 billion, and it expects that total to grow in the year ahead.

“Government policies and market innovation will spur more gender-related bond issuance,” Moody’s said, noting that US$148 billion in bonds that contribute to at least one project aimed at supporting gender equality have been issued since 2017.

“Investors are increasingly looking to fixed-income markets to support gender equality,” it said.

Moody’s also noted that, while public-sector projects will remain the dominant driver of gender-related bond issuance, growth opportunities exist for private sector.

“In the private sector, gender-related sustainable bond issuance has been predominantly from the financial sector, given their ability to deploy proceeds effectively to a number of projects in their lending activities that support gender equality,” Moody’s said.

However, Moody’s reported that issuers in carbon-intensive sectors, such as energy, utilities, manufacturing, and mining, have expanded their share of private sector gender-related sustainable bond issuances to 24% in 2023, up from 8% in 2017.

Additionally, the report noted that gender-focused projects are increasingly being included in sustainability-linked bond frameworks, which “shows that green and social projects can be mutually beneficial.”

“[Sustainability-linked bond] issuers can tackle both environmental and social goals simultaneously while linking their financing to achievement of set targets,” it said. “Sustainability-linked loans will also be a tool for issuers to add sustainable features to their financing facilities.”

James Langton

James is a senior reporter for Advisor.ca and its sister publication, Investment Executive. He has been reporting on regulation, securities law, industry news and more since 1994.