The report analyses data on 169 outstanding listed green, social, sustainability and sustainability-linked (GSSS) bonds identified via the LGX Datahub as of 23 February 2023. The LGX Datahub, a platform that contains information on over 11,000 sustainable bonds, currently has around 50 gender-focused bonds flagged. The bond flag identifies debt securities that raise financing for projects advancing gender equality, noted a press release from the Luxembourg Stock Exchange.

“Gender inequality is jeopardising the ongoing transition to a more sustainable and inclusive world. By analysing the current state of the gender-focused bond market, our objective is to foster awareness of the role that gender finance plays in advancing gender equality in our economies and societies,” said Laetitia Hamon, head of sustainable finance at the Luxembourg Stock Exchange. “Through this study, we provide essential market insights and information which may encourage issuers and investors alike to consider including a gender component in their financial strategies and investment decisions.”

Excluding supranational issuers like the European Investment Bank, the World Bank or the International Monetary Fund, 59% of gender-focused bonds--representing 80% of the amount raised through such bonds worldwide--are issued by entities based in Europe.

Here are seven takeaways from the study.

80% of gender-focused bonds are social or sustainability bonds

Nearly 80% of gender-focused bonds are sustainability bonds (46.15%) or social bonds (33.73%). “Green bonds can also be gender-focused and allocate the proceeds of their bonds to projects targeting women,” stated the study.

Acceleration in issuances since 2020

From one gender-focused bond issuance in 2014 to 84 issuances in 2021, there has been an acceleration in the issuance of gender-focused bonds in the last few years. This reflects an “uptick in interest from investors for this type of instrument,” said the report.

As of February 2023, LGX had already identified 25 gender-focused bonds, with 81 additional potential gender-focused bonds. These bonds had included Sustainable Development Goal 5--gender equality and women’s empowerment--in their pre-issuance documentation but have not yet issued a post-issuance report.

Gender-focused bonds account for 1.79% of all GSSS bonds

Despite increasing issuance and interest, bonds that have a gender component still represent a “marginal proportion” of all sustainable bonds.

Of the 9,455 sustainable bonds in the LGX DataHub, only 169 of them are gender-focused bonds.

Most gender bonds issued by sovereigns, supranational and agencies

65.68% of gender-focused bonds are issued by sovereigns, supranational and agencies (SSA)--they issued 111 of the 169 gender-focused bonds. Corporate issuers have issued the lowest number of gender-focused bonds--25.

Nearly 50% for socio-economic advancement & empowerment and affordable housing

29.28% of the amount issued through gender-focused bonds--€21.52bn--goes to the socio-economic advancement and empowerment of women, while 20.54%--or €15.10bn--goes to affordable housing, found the study. Together, this makes up nearly 50% of the total €73.51bn issued through gender-focused bonds.

Access to essential services, affordable basic infrastructure, green buildings, pollution prevention and control, employment generation, food security and “miscellaneous” objectives account for the remaining €36.89bn.

But more than half of gender-focused bonds do not explicitly mention women

“55% of gender-focused bonds’ documentation do not explicitly refer to women in their target population,” said the report. Typical terms include vulnerable groups, migrants and/or displaced persons.

According to the study, 45% of these bonds include one of the three following wordings: women and/or sexual and gender minorities; pregnant women; diversity-owned small businesses.

5% of gender-focused bonds report on women-specific impact metrics

Only 5% of gender-focused bonds report on specific, gender-related terms. Examples featured in the study included the number of loans to women-owned enterprises, the share of girls in school or the number victims of gender violence who had been supported, thanks to the use of the proceeds from gender-focused bonds.

Recommendations

To boost growth in the gender-focused bond market, the Luxembourg Stock Exchange had several recommendations, including: increasing awareness and availability of bonds that contribute to women’s empowerment, explicitly identifying women when describing target groups that benefit, reporting on impact and benefits that specifically relate to women, and integrating gender components transversally.

Read the full “Linking gender and finance: An overview of the gender-focused bond market” report .