Social and Sustainability Bonds
Social bonds, sometimes also referred to as social impact bonds, are a financial product that can be used to finance or refinance projects and activities that generate positive social outcomes.
Social bonds use the same financing structures as green bonds. However, while green bond financing is used to address environmental issues, the projects and activities financed through social bonds address social issues. Some examples of positive social outcomes generated through social bonds include reduced poverty, reduced inequality, improved access to education, food security, and others.
Sometimes, projects financed or refinanced through social bonds may also have a joint positive environmental impact. In that case, companies may choose to issue sustainability bonds. Sustainability bonds can be viewed as a combination of green and social bonds and are used to finance or refinance projects that address both social and environmental concerns.