19 September | 09:00-10:00 ICT

Keeping Human Rights Front and Center in the Sustainable Debt Market

Organized by:

LRQA
Impact Investment Exchange

Background

The global sustainable debt market—which includes green, social, sustainability, sustainability-linked, and transition bonds (collectively known as GSS+)—is experiencing rapid growth. Over the past four years, annual issuance has consistently ranged between $800 billion and $1 trillion. Notably, around two-thirds of this volume is made up of green or climate-focused bonds.

Human rights practitioners should be heartened by this mainstream shift toward sustainability. However, there is a real risk that, in the rush to mobilize capital for environmental objectives, human rights concerns may be overlooked or neglected.

A key concern in the green bond space is its tendency to favour more developed economies - those better equipped to invest in decarbonization. This dynamic risks further marginalizing vulnerable countries, by diverting capital away from where it’s most urgently needed. In addition, while environmental outcomes are often closely monitored, social and human rights impacts may not be, undermining the broader promise of sustainable finance.

There are, however, promising developments in the thematic bond space that keep vulnerable communities front and centre. This session will spotlight the positive impacts of sustainable bonds that integrate social and human rights risk considerations into climate finance, such as the Orange Bond Principles, and explore how investors can ensure adherence to such principles through robust social and human rights due diligence on projects financed by sustainable bonds.

Key Objectives

Participants will gain a clearer understanding of how current thematic bond frameworks (green, sustainability, sustainability-linked, and transition) may unintentionally overlook or exacerbate human rights risks—particularly in vulnerable or under-resourced regions.
The group will identify solutions and key actions needed to better integrate human rights into the sustainable finance market — including more holistic (E, S and G) due diligence and more inclusive thematic bonds.

Guiding Questions

How can the sustainable bond market avoid reinforcing existing inequalities between high-income and low-income countries or communities? Should there be criteria to ensure funds reach vulnerable populations?
How can investors and issuers be incentivized to look to bonds such as Orange Bonds?
How can communities and investors come together to ensure that capital mobilized through sustainable bonds supports both environmental and human rights outcomes.
How well are human rights currently integrated into the frameworks and standards governing green, sustainability, and transition bonds? What gaps do you see in existing taxonomies or disclosure requirements?
To what extent do current sustainable finance instruments prioritize investments that that build in both climate and human rights protections? Are there examples where this balance has been achieved—or missed?
Who should be held accountable if a sustainable bond-financed project results in human rights violations, such as displacement or labor abuses?