Using social bonds to address gender and racial inequities (podcast)

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Guest Author

Anna Smukowski

Corporate, nonprofit and municipal issuers are designating bond proceeds to support organizations that increase access to finance for women and people of color.

Such issuance is growing, it “could be increased in the market” said SMBC Nikko’s Philip Watkins, who hosted the latest social bond podcast from International Capital Market Association. Natasha Garcha of Impact Investment Exchange (IIX) and I were guests on the podcast.

Gender smart

“Gender equality is the single greatest predictor of peacefulness of a state, more so than wealth, democracy, or dominant faith,” said Garcha. Gender-focused bonds such as IIX’s Orange Bond Initiative, IDB Invest gender bonds in Latin America and QBE’s Gender Equality Bond in Australia are moving capital to enterprises that empower women.

IIX’s Orange Bond Initiative is the world’s first set of bonds built for and by the Global South as a solution to finance gender equality. IIX issued the $50 million IIX Women’s Livelihood Bond, its first orange bond (orange is the color of United Nations Sustainable Development Goal 5: Gender Equality), in December of last year. The bond blends gender and climate themes to empower roughly 300,000 women and girls across Asia and Africa to build sustainable, climate-resilient livelihoods. 

Garcha’s call to action: That investors “rise to bridge gaps by channeling capital to gender equality at a far greater pace and scale than we are doing now.

Returns on inclusion

In the US, issuers have taken the lead in integrating racial equity into use of bond proceeds. 

“Millions of people face barriers to opportunity based on race,” I shared with Watkins. Enterprise and other community development finance institutions in the U.S. aim to break down such barriers so families and communities can flourish. “Social bonds have proved a powerful way to tell our story to new parties looking to align their capital with purpose.”

 The Enterprise Community Loan Fund in 2021 issued the first Racial Equity Bond, with all $30 million in proceeds used to provide loans to Black, Indigenous and people of color housing developers. The finance mechanism was issued under Enterprise’s Equitable Path Forward initiative, a $3.5 billion nationwide initiative to help dismantle the legacy of racism in housing.


Anna Smukowski is senior director of capital programs at Enterprise Community Loan Fund.