The signed partnership aims to give impetus and visibility to gender, gender-related ties in order to mobilize sufficient capital to make a significant contribution to the fifth UN Sustainable Development Goal (SDG), which is to “Achieving gender equality and empowering all women.” and girls. ” The two partners will work together to promote sustainable debt instruments that raise funds for projects that contribute to this goal. They will be inspired by the recommendations of the report “Gender Bonds: A Guide for Sustainable Debt Practitioners for Gender Equality”, published jointly by “UN-Women” (UN Organization for Gender Equality and Women’s Empowerment), ICMA (International Capital ). Market Association) and IFC (International Finance Corporation).
What is contained in this memorandum of understanding and what will be the role of the Luxembourg Stock Exchange?
Julie Becker. – By concluding this UN-Women Memorandum of Understanding, we are committed to promoting gender equality and women’s empowerment by better linking finances and gender. In many parts of the world, women are still excluded from economic activities and financial services. If we want to close the gender gap in the world economy, we must provide women with access to education, opportunities and finances. That is why gender funding and gender-focused investments are so important.
As an exchange, we have a key role to play in ensuring the visibility of these bonds, as well as issuers that have the courage and ambition to address women’s access to finance. We also want to inform and guide many investors who want to support this business to the right products. Therefore, we want to go beyond a simple rating, which should be marked by performing work on the analysis and verification of the stated intentions and the correct distribution of funds. We will ensure that the funds are distributed in accordance with what is declared in the report on the issue. And ideally, we hope to be able to measure the impact.
By doing this work, we hope to cause a ripple effect.
The gender bond market has emerged recently. How is it structured?
“Gender bonds are a type of social, sustainable or sustainable relationship.
We distinguish between gender and gender-oriented relationships. In the first 100% of the collected funds are intended for women, and in the second only a part is allocated for these funds. In Luxembourg, we have mainly gender-oriented bonds, of which 36 with an outstanding amount of € 24.4 billion are issued by eight issuers, six of which are multilateral development banks. An interesting parallel can be drawn: we are exactly where we were in 2007, when the first green bonds were listed on the Luxembourg Stock Exchange, when the issuers were multilateral development banks, not banks and corporations in this market. Today, of the 8 gender bond issuers here in Luxembourg, there is a stock exchange and Private Equity.
Who benefits from the funds raised?
“It is not surprising that it is developing countries or developing countries that, with the support of multilateral development banks that issue, benefit from the funds raised. But this is not the limit. Private Equity, which I mentioned earlier, operates in the Nordic countries, particularly Sweden, and wants to help increase the number of women on the boards of directors of the companies in which they invest.
Our goal is to really motivate and encourage us to move in the right direction, to mobilize these funds to improve the status of women where necessary.
It may seem that today it issues as many bonds, how many social problems need to be fixed? Aren’t we nearing the end of the exercise?
“The fact is that investors should focus their investments on things that are dear to them, which correspond to their values and beliefs. Among environmental investors, some support forests more than the oceans. It is important to be able to meet the investment needs and values of investors. We could have as many obligations as there are reasons to defend. Costa Rica has issued a Jaguar bond, and the World Bank has issued a rhinoceros bond. Shows that have found their audience.
Is there a risk to the future of these investment products as rising interest rates put pressure on the bond market?
“There is a risk that there may be fewer issuers who are now willing to pay higher interest rates to finance their environmental or social projects. I am sure that there will be less prepayments and refinancing operations.
But bonds remain a safer product, less volatile than stocks. And this is a product whose long-term horizon puts it at the center of the theme of transition and sustainability. “
This interview is taken from the biennial Paperjam Finance newsletter to follow the financial news in Luxembourg.
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