Social Bonds

Social Bonds

News: The National Bank for Agriculture and Rural Development (NABARD) has successfully raised Rs 1,040.50 crore through a five-year social bond.

Background:
• The social bonds issued by NABARD have received ‘AAA’ ratings from CRISIL and ICRA, and they will be listed on the BSE (Bombay Stock Exchange).
• NABARD recently introduced a Sustainability Bond Framework, aimed at financing and refinancing green and social projects.

What are Social Bonds?
• Social bonds, in a financial context, are a type of debt security or fixed-income instrument issued by governments or public entities to raise funds for specific social or community-oriented projects or initiatives.
• Social bonds are a subset of green bonds and sustainable bonds that focus on environmental, social, and governance (ESG) goals. While green bonds primarily fund environmentally friendly projects, social bonds are specifically earmarked for projects that have a positive social impact.