German index provider Solactive has rolled out a social and sustainable bond index with the Climate Bonds Initiative (CBI). Solactive has used the CBI’s Social and Sustainability Bond database for its Global Social and Sustainable Bond Index, which offers a “standalone strategy for the ‘S’ in ESG”. The rules-based, and market value weighted index includes bonds issued by central governments, government-related and corporate issuers and has a “broad focus which can be adjusted to match client specific needs and preferences for the index construction”. The CBI screens self-labelled debt instruments to identify social or sustainability-related securities, with the process including external reviews and an analysis of the use of proceeds. The bonds must be aligned with the core components of the principles and guidelines set by CBI. The social bond label includes bonds where proceeds focus on delivering positive social outcomes, such as affordable basic infrastructure and access to essential services like health and education, while sustainability bonds are a mixture of green and social projects.
