Insights
Orange Bonds positively impacting women
A relatively new investment approach that supports women in business
"The reason I like this bond so much is because if you can help secure stable income for the wāhine in the family then the children can go to school" John Berry
Orange Bonds
Orange bonds are a relatively new investment approach that help support women in business, often in developing markets. Named after the colour of Sustainable Development Goal 5: Gender Equality, they are an emerging funding tool that aims to empower 100 million women, girls and gender minorities by unlocking US$10 billion in capital by 2030.
First released in October 2022, the Orange Bond Principles are designed to help us as investors, as well as issuers, arrangers and certifiers by establishing the Orange Bond financing criteria. This sees Orange Bond capital go to projects and enterprises that substantially benefit women and gender minorities. They are designed to support the development of a gender equitable workforce and / or inclusive value chains and are a great way not only to support women but are one of the best investments to fight climate change.
Research shows that when women run and grow sustainable businesses, especially in climate smart agriculture, they can inspire community action to build climate resilience; innovate to adopt green technologies; and lead on local and global policy that changes the status quo. This results in increased prosperity, reduced carbon emissions, and improved adaptation and resilience to the effects of climate change, which are already being felt, especially in the world’s most marginalized communities.
By unlocking the potential of women and gender minorities, some projections show this could add US$28 trillion to the global economy by 2025.
The Women’s Livelihood Bond
Pathfinder supports the evolution of Orange Bonds by investing in multiple bonds, including the Women’s Livelihood Bond (WLB5). It invests in a portfolio of high impact enterprises across Asia and Africa to enable more than 300,000 women and girls to build economic resilience and advance climate action. In essence, this is a combination of both Green and Orange Bonds.
“The reason I like this bond so much is because if you can help secure stable income for the wāhine in the family then the children can go to school. You support not only the women and the children, but also their future generations. You are essentially driving inter-generational impact,” says John Berry. “This is done by funding a business venture that then gets paid back with interest.”
The proceeds from the WLB5 are used to make loans to high-impact enterprises run by women and gender minorities in Cambodia, India, Indonesia, Kenya and the Philippines. These loans fund six sectors: microfinance, small and medium enterprise lending, clean energy, sustainable agriculture, water and sanitation and affordable housing.
All our KiwiSaver funds and the Ethical Growth Fund include Orange Bonds.
To find out what else Pathfinder do to invest in women please take a look at our Sustainability Report.
