The sustainable bonds market has exploded in recent years, with the issuance of green, social, sustainable and sustainability-linked bonds doubling in the first half of 2021 alone.

For issuers, these bonds are a way to finance meaningful action on climate and sustainability. For investors, they are a way to invest in climate and environment-related projects, and to incentivize businesses to improve their performance on sustainability.

But few green or sustainability-linked bonds to date have incorporated gender or other forms of diversity such as race or ethnicity into their vehicles. This matters, because we know that paying attention to gender and diversity is a key to managing risk and expanding opportunity, and is essential to a just transition. We won’t find and implement the solutions we need if we’re not drawing upon the insights, experience and intelligence of the total population. And we can’t solve for climate mitigation and adaptation if we don’t take into account the needs of the people most affected by the climate crisis.

Many companies that are issuing sustainable bonds are already doing powerful, committed work on both climate and gender. So why not bring them together?

Recent work by the IFC, ICMA and UN Women highlights how sustainable debt instruments can be used to advance gender equality in both the public and private sectors.

Working with IISD and the ASEAN Low Carbon Energy Program, GenderSmart’s Climate & Gender Investment Working Group recently published a how-to guide that builds upon this work with case studies of how some innovative sustainable bond issuers are already integrating gender considerations into their bonds, and proposes a path forward for green bonds to do the same.

The guide looks at two types of bonds: green bonds, which finance climate and environment-related projects; and sustainability-linked bonds, which set specific sustainability performance targets that may increase or decrease bond interest rates if the beneficiary does or does not meet the KPIs.

A number of private companies are already incorporating gender into their sustainability-linked bonds, as part of their broader ESG commitment.

In the guide, the team looks closely at four examples, including French energy company Schneider Electric, which includes the percentage of female employees, managers and women in leadership amongst its sustainability performance targets, alongside CO2 emissions reductions and other workplace diversity targets.

Read the full article about investment bonds by Suzanne Biegel at GreenBiz.