LuxSE and CEB mark EUR 10bn of Social Inclusion Bonds

Luxembourg - The Council of Europe Development Bank has passed the EUR 10 billion mark in total Social Inclusion Bond issuance since its first social bond was issued in 2017. Today, the CEB celebrated this important milestone at the Luxembourg Stock Exchange, where the bonds are listed.

In the presence of Luxembourg Minister of Finance Gilles Roth, the Governor of the Council of Europe Development Bank (CEB) Carlo Monticelli visited the Luxembourg Stock Exchange (LuxSE) for the very first time today to celebrate a crucial milestone in the Bank’s pioneering contribution to creating social impact through sustainable finance.

With the social development bank’s latest Social Inclusion Bond issuance in April this year, its largest ever syndicated Social Inclusion Bond of EUR 1.25bn, the CEB has raised a total of more than EUR 10bn through its Social Inclusion Bonds since 2017. Through these bonds, the CEB has supported vulnerable communities, fostered social cohesion across Europe and acted as a first responder in large-scale social crises.

All the Bank’s social bonds were listed on the Luxembourg Stock Exchange and displayed on the Luxembourg Green Exchange (LGX), the world’s leading platform for sustainable securities.

Gilles Roth, Luxembourg Minister of Finance, remarked that: “Achieving the cumulative issuance of €10 billion in social inclusion bonds is a fantastic milestone that highlights the CEB’s commitment to sustainable growth. By focusing on the social dimension, we ensure that progress leaves no one behind. Pursuing efforts in social finance allows us to harness the power of finance to build a better, more equal future for all. The Luxembourg Stock Exchange’s role as a key partner and listing location for these social bonds is a wonderful demonstration of the platform’s capabilities.”

Pioneering social bond issuance

The CEB was one of the early issuers of social bonds and has shaped the social bond market as an active issuer, but also as a founder of the International Capital Market Association’s social bond working group, which led to the establishment of the industry-leading standard for social bonds, the Social Bond Principles in 2017.

Initially, the Paris-based social development bank issued its Social Inclusion Bonds exclusively in EUR. Since 2020, the Bank has issued social bonds in multiple currencies, including USD, SEK, NOK, AUD and CAD, thereby expanding the appeal of the social bond market and responding to the needs of a diversified investor community.

“We embarked on this extraordinary journey nearly a decade ago, and over the years our Social Inclusion Bonds have become a hallmark of the CEB on the international capital markets. Today, I am delighted to celebrate our EUR 10 billion milestone at the Luxembourg Stock Exchange, which has been a dedicated and loyal partner of the CEB every step of the way,” commented Governor Monticelli.

In the early days of its social bond issuance journey, the CEB focused on three categories of social impact, namely education, social housing and MSME lending. When the COVID-19 pandemic hit in 2020, the CEB added another social category to its list, namely health. Today, the Social Inclusion Bonds represent more than 40% of the CEB’s annual funding.

From green to social impact

Initially, the focus of sustainable finance was on contributing positively to different environmental goals and help accelerate the green transition. The social dimension came to the fore in 2020, when governments and companies alike raised funding to address the far-reaching social and societal fallout from the COVID-19 pandemic.

“We are proud to serve as the reference exchange for the Council of Europe Development Bank’s Social Inclusion Bonds. The CEB is one of our leading issuers in the social bond sphere and we applaud the Bank’s pivotal role in propelling the social aspect of sustainable finance and contributing to a fair and just transition. By leveraging capital market financing, the CEB has significantly improved the lives of vulnerable communities throughout Europe,” commented Julie Becker, CEO of LuxSE.

LGX started as a platform for green bonds in 2016. In response to market developments, LuxSE increased the scope of instruments to include social and sustainability bonds the following year. One of the first social bonds displayed on the social bond window of LGX was the first Social Inclusion Bond issued by CEB.

The relationship between the CEB and LuxSE precedes the Social Inclusion Bonds, and dates back to 1985, when the first bond issued by the CEB was listed on LuxSE. Today, there are around 50 outstanding bonds issued by the CEB listed on LuxSE, totalling EUR 30 billion, which includes 14 Social Inclusion Bonds.