The Social Bonds Market in the COVID-19 Crisis Environment

Authors:

Pages: 48-57

Abstract:

Over the last decade, debt markets have undergone major transformations. There is a transition from standard financial instruments to thematic ones, both under the influence of the growing interest in ethical investing and as a key tool for financing specific projects. The COVID-19 pandemic has caused upheavals in all aspects of social and economic life. Its impact on the individual segments of the financial markets, including debt market, is clear. While the green bond issues declined sharply after the beginning of the crisis, the social bonds faced the exact opposite trend – an eightfold increase in the volumes issued in 2020 compared to the previous year. Due to the uncertainties related to the development of the pandemic and due to its long-term effects, the popularity of bonds with sustainable characteristics, including those issued for financing social projects within the EU, is expected to increase. The article aims at analysing the state of the social bond market in the conditions of the global health crisis, as well as the trends for its further development. The individual market segments, differentiated by different criteria, are also studied.

Keywords:

sustainable finance; debt market; social bonds.

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