The US government is driving a $1.8 trillion corner of the sustainable debt market, despite the ongoing green retreat led by President Donald Trump.
According to Bloomberg, the sales of social bonds, which direct proceeds to health, housing, and education, jumped about 130% to $657 billion globally last year and continued at a similar pace in the first quarter.
The bonds now have $1.8 trillion outstanding, compared with green bonds at $3.9 trillion.
The surge in social bond sales has been largely driven by the Government National Mortgage Association (Ginnie Mae), which broadened its debt program to sell more debt for projects aimed at low-income households and veterans, Bloomberg said in the report.
The US housing agencies have been responsible for a majority of this year’s $149 billion in new deals, with Ginnie Mae accounting for almost two-thirds of that.
The debt also is posting solid returns for investors, with the ICE Social Bond Index outperforming its green bond peer this year with a 3.4% gain.
Standard Chartered Plc issued a €1 billion ($1.1 billion) social bond for the first time to lend to small firms, including women-owned businesses across Asia, Africa, and the Middle East.
The UN estimates there’s an annual financing gap of about $4 trillion to achieve sustainable development globally as poorer countries lack resources for education, health care, and social protection.
