AIB has launched a framework intended to enable it to issue social bonds in the near future.

Funds raised by AIB under the social bond framework will be earmarked for loans to social and charitable organisations, as well as SMEs and microenterprises operating in socioeconomically disadvantaged areas.

The market demand for such financial products has been steadily growing, with euro issuance of bonds for environmental, social and governance (ESG) purposes set to exceed €350bn this year.

The framework for social bonds is required to significantly contribute to the furthering of six United Nations Sustainable Development Goals.

The bank points to the example of the potential of the new framework to facilitate lending to a housing body for the purposes of constructing new social and affordable homes.

In Association with

The framework was arranged and structured with the support of international ESG advisor bank ING.

AIB CEO Colin Hunt (pictured) said: “Investors are increasingly considering ESG factors when it comes to making investment decisions.

“Having launched our green bond framework in 2019 and successfully issuing two green bonds, raising a total of €1.75 billion in funding for environmental and climate related projects, we are now launching a social bond framework that will support communities across Ireland.

“Our Social Bond Framework lays the foundation for us to raise funds in the form of Social Bonds which will support positive societal change, helping provide new social and affordable housing, support access to education and healthcare, finance SMEs in disadvantaged areas, charities and non-profits.”

Pic: Sam Boal