The Art of Social Bond Impact Reporting
In Sustainable Finance, social issues have long been addressed through the lenses of risk factors and minimum safeguards. Conversely, Use-of-Proceeds Social Bonds focus on the contribution to adequate living conditions (e.g. housing, education, health). The COVID-19 crisis scaled-up this market with record-size inaugural Social Bonds in 2020. Post-issuance impact reporting is an integral part of the ICMA Social Bond Principles. This is an arduous task for issuers but also the most scrutinized by investors. Impact reporting practices are nascent and not standardized. The present benchmark covers 16 Social or Sustainability Bond issuers’ reporting. We depict these ever-evolving practices as an “art” because of the intricacies of this exercise. Based on best practices identification, we put together a set of recommendations regarding target population segmentation, data sourcing diversification, third-parties involvement, KPI design, methodologies disclosure and data visualization.