Community and economic development

Amount invested in 2019: $547.8 Million

Impact case study: Women’s Livelihood Bond 2 (WLB2)

Sector:  High yield, financial institution

 

Women’s Livelihood Bond 2 (WLB2) is the second in a series of multi-country, gender-focused bonds managed by Impact Investment Exchange (IIX) — a Singapore-based financial institution whose mission is “to create an inclusive financial system where women, the environment and disadvantaged communities are valued and have a voice.” Investors in WLB2 benefit from both public and private credit protection, with a 50% loan portfolio guarantee from the United States Agency for International Development (USAID) and first loss capital provided by The Rockefeller Foundation.³

WLB2 aims to help transition women in Southeast Asia from subsistence to sustainable livelihoods. Specifically, the bond's proceeds provide capital to seven borrowers in four countries (Cambodia, Indonesia, India and Sri Lanka) that operate in three sectors: small- and medium-sized enterprise (SME) lending, renewable energy and sustainable agriculture. These borrowers, in turn, provide low-cost capital and financing to women in these target populations.

IIX has developed an impact assessment framework that includes five primary outcomes for the bond's beneficiaries:

Other examples

International Development Association (IDA)

Sector: Investment grade, government related – credit

 

Mission

The IDA is an international organization established in 1960 and owned by its 173 member countries. It is the largest multilateral channel for providing favorable financing and knowledge services to the world’s poorest countries and is one of the five institutions of the World Bank Group.

Use of proceeds

Net proceeds from the sale of these notes will be used to support sustainable development projects and programs in IDA’s member countries.

Measurable impact

Between fiscal years 2018 - 2019, IDA programs had measurable impacts that included:

• 172.3 million people benefited from essential health, nutrition, and population services
• 22.8 million people benefited from access to electricity
• 66,000 people benefited from access to financial services
• 4.4 million farmers trained
• 847,222 MWh of energy saved
• 14.2 million MT of CO2-equivalent emissions avoided

Starbucks Coffee Company

Sector: Investment grade corporate bond

 

Mission

Starbucks’ C.A.F.E. Practices, an ethical program for sourcing coffee, was developed in 2004 with Conservation International, an environmental NGO. C.A.F.E. Practices include standards related to quality, economic, social, and environmental performance. C.A.F.E. Practices also promote environmentally responsible growing methods, ensure minimum wages and fair working conditions, and advocate for economic transparency and resource management.⁵

Use of proceeds

With the inaugural May 2016 issuance of a $500 million sustainability bond, Starbucks made a commitment to use the bond’s proceeds for improving its supply chain’s environmental and social impact. Proceeds from the issuance were used in its first year to elevate the positive impacts of Starbucks coffee supply chain in three ways:

• Adding 86 new Coffee and Farmer Equity (C.A.F.E.) Practices-verified supply chains, primarily represented by new coffee farms and mills. This provides a portion of nearly 650 million pounds of coffee sourced by Starbucks from May 2016 to May 2017. Over 2.7 billion pounds of C.A.F.E. Practices-verified coffee was also available for other roasters to purchase during the same period.
• Developing⁵ new Farmer Support Center and operating 8 existing Farmer Support Centers
• Providing loans to farmers across the globe through the Global Farmer Fund

Measurable impact

88,000 coffee farmers were trained through the nine farmer support centers in 2019.

 

We invested $3 million in a sustainability bond issued by Starbucks