New research by Moody’s Ratings suggests that social bond issuance could reach US$150 billion in 2025, up from US$19 billion in 2019. The data provider attributed this growth to mounting structural need for affordable housing and essential services. This situation was exacerbated during the pandemic as governments aimed to fulfil immediate social needs, like healthcare and employment support. Going forward, aging populations mean that governments, particularly those in advanced economies, will face heightened demands for access to healthcare, while emerging markets are likely to spend more on education and affordable housing to tackle rising social inequalities and ensure sustainable economic growth, Moody’s said. In addition, the ongoing transition to a low-carbon economy will “catalyse” demand for a just transition, meaning investment in the reskilling of workforces as business practices are reshaped to become more sustainable.
