GISD members call for COVID-19 bonds issuance

In a joint call to action, leaders of prominent businesses and financial institutions encourage companies and governments to issue innovative social bonds to address the COVID-19 pandemic. Funds raised through these bonds would be used for the immediate response to COVID-19 and to support a sustainable recovery.

The Global Investors for Sustainable Development Alliance (GISD) statement defines the direct and indirect challenges presented by the pandemic and outlines the expectations for a COVID-19 bond issuance,  in alignment with the Sustainable Development Goals (SDGs).

Though the issuance of relief and social bonds has risen exponentially in 2020 – exceeding $55 billion by mid-April, more than the total value of social bonds issued in 2019 – the GISD Alliance is the first to encourage alignment with specific SDG targets.

“The COVID-19 pandemic is an unprecedented global challenge that requires unprecedented action,” said Leila Fourie, CEO of the Johannesburg Stock Exchange and co-chair of GISD. “COVID-19 bonds are an innovative solution to raise resources for response and recovery while creating additional positive contributions to sustainable development.”

The statement is a first-of-its-kind call to action for issuance of COVID-19 bonds. It was developed jointly by investors and underwriters to support high-priority activities that address the negative impacts of COVID on public health, livelihoods and economic wellbeing.

“The ongoing pressures faced by many entities, particularly small- and medium-sized enterprises, from COVID-19 means that this Call to Action will continue to be relevant for some time to come,” said Manny Roman, CEO of PIMCO and member of GISD.

According to the statement, bonds issued for COVID-19 response should follow the International Capital Markets Association’s (ICMA) Social Bond Principles or Sustainability Bond Guidelines.

ICMA CEO Martin Scheck said of the Call to Action, “Social and Sustainability Bonds aligned with the Social Bond Principles are immediately applicable to efforts addressing the COVID-19 crisis. We welcome this Call to Action and its support for the use of these instruments to help finance the response to the global socioeconomic crisis created by the pandemic.”

It also encourages the issuers to use GISD’s definition of Sustainable Development Investing, which the members of GISD announced earlier this year, to ensure capital is deployed in ways that make positive contributions to sustainable development.

_{Photo by Michael Marais on Unsplash.}