The Republic of Iceland has made history on the sovereign debt markets by issuing a 50 million euro bond dedicated to gender equality. This “gender bond” represents a major step forward in the mobilization of public finances to promote gender equality and support projects that foster the inclusion of women and gender minorities.
Eligible projects for a better quality of life
The funds raised through this loan will be allocated to various projects aimed at improving the living conditions of women and gender minorities in Iceland. These initiatives include
– affordable housing: increasing the supply of affordable housing for low-income women.
– parental leave: increase maximum payments during parental leave to encourage both parents to take advantage of their equal right to paid parental leave.
– decent living conditions: ensuring decent living standards for women and gender minorities.
The loan, which carries a fixed coupon of 3.4% and a maturity of three years, was issued in the form of a private placement to Franklin Templeton, and arranged exclusively by BNP Paribas.
Iceland’s commitment to sustainable finance
In April 2023, Iceland published an annex to its sustainable financing framework entitled “The Financing for Gender Equality Annex”. This document details how the country intends to mobilize funds to achieve ambitious gender equality goals.
The issuance of this gender bond is part of a series of initiatives aimed at strengthening Iceland’s commitment to sustainable finance. Earlier this year, the country had already broken new ground with its first green bond, also orchestrated by BNP Paribas.
A world leader in gender equality
Iceland is recognized as one of the most gender-equal countries in the world, holding first place in the World Economic Forum’s Global Gender Gap Index for 14 consecutive years. Despite this leading position, the country continues to pursue ambitious goals to achieve absolute gender equality and promote the social and economic advancement of women.
Recent studies, such as McKinsey’s study on diversity and inclusion, show that organizations ranking in the top quartile for gender diversity are 27% more likely to perform better financially than those in the bottom quartile. This underlines the link between gender equality and the economic resilience of companies and economies.
Statements from key players
Sigurรฐur Ingi Jรณhannsson, Minister of Finance and Economic Affairs, expresses his enthusiasm: “The gender bond is an exciting addition to our sustainable debt portfolio, following the issuance of our first green bond earlier this year. By being the first state to issue a gender bond, Iceland is using its position as an international leader in gender equality to set an important example for other nations, with a new approach to mobilizing financial markets and public finance to promote gender equality.”
Frederic Zorzi, Global Head of Primary Markets at BNP Paribas, added: “It is a privilege to have supported the Republic of Iceland in this first sovereign gender bond. It demonstrates the country’s vision and leadership in harnessing capital markets to address gender equality. The progressive use of funds also supports women’s economic resilience and social advancement, paving the way for further financial innovations for sovereigns.”
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