POLICY BRIEF - Integrating Gender Considerations in Green Bonds

POLICY BRIEF

Integrating Gender Considerations

in Green Bonds

David Uzsoki and Safa Rahim

October 2021

This article was commissioned by the ASEAN Low Carbon Energy Programme (LCEP)

and funded by the Foreign, Commonwealth & Development Ofﬁce (FCDO).

Introduction

Achieving gender equality

is essential for a prosperous and sustainable world, as it aects

all aspects of sustainable development. To scale up ﬁnancing to advance gender equality, all

new sustainable bond issues, irrespective of their thematic focus, should include gender

considerations in their respective bond frameworks.

To better understand the scale of this

opportunity, one must look at the total new issuance of sustainable bonds that includes green,

social, sustainability, and sustainability-linked bonds. In 2020 alone, bonds worth USD 532.3

billion

were issued globally, which is almost 70 times the size of all outstanding gender-

labelled investments today across asset classes. Cumulative sustainable debt issuance to date,

which also includes sustainable loans, has recently surpassed the impressive USD 3 trillion

threshold.

Throughout this paper, the term “gender equality” is used in a broad sense to reference the framework developed

by Caroline Moser in collaboration with United Kingdom’s Department of International Development’s

Infrastructure and Cities for Economic Development Facility (ICED) in 2016. Pease see the Annex for more

information.

For information on the business case of gender-aligned sustainability debt and how gender is interlinked with

climate, please see our previous publications on this topic here and here.

Social bonds: USD 147.7 billion; sustainability bonds: USD 68.7 billion; green bonds: USD 305.3 billion;

sustainability-linked bonds: USD 10.6 billion. BloombergNEF. (2021, January 11). Sustainable debt breaks

annual record despite Covid-19 challenges. https://about.bnef.com/blog/sustainable-debt-breaks-annual-record-

despite-covid-19-challenges/

BloombergNEF. (2021, June 10). Sustainable debt issuance hits 43 trillion threshold. https://about.bnef.com/blog/

sustainable-debt-issuance-hits-3-trillion-threshold/

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Integrating Gender Considerations in Green Bonds

The purpose of this article is to demonstrate how gender considerations could be integrated

into green bonds. Among the dierent types of sustainable bonds, green bonds are by far

the largest, with a total issuance of USD 305.3 billion in 2020.

At the same time, green

bonds are also the least likely to include any type of gender criteria in how their proceeds are

allocated.

Perhaps this is not surprising, considering that their primary objective is to ﬁnance

projects that meet the issuer’s environmental objectives. While the inclusion of a dedicated

gender-speciﬁc project category would not be possible in green bonds, there are dierent ways

to ensure that the bond’s proceeds are also meeting gender objectives.

Any gender integration must be done directly in the green bond framework. It is a legal

document that outlines the issuer’s objectives, governs how the bond proceeds are allocated

and managed, and describes the process for project evaluation, selection, and reporting. The

bond framework is usually publicly available, so investors can evaluate the sustainability

ambition of the issuer. This article explores three approaches to gender integration through

the lens of three dierent green bond issuers.

Box 1. What is a green bond?

“Green bonds are any type of bond instrument where the proceeds or an equivalent

amount will be exclusively applied to ﬁnance or re-ﬁnance, in part or in full, new and/

or existing eligible green projects and which are aligned with the four core components

of the ICMA Green Bond Principles, namely the Use of Proceeds, Process for Project

Evaluation and Selection, Management of Proceeds, and Reporting.”

How to Integrate Gender Considerations Into Green

Bond Frameworks

To demonstrate the dierent ways to mainstream gender objectives in green bonds, we have

chosen the green bond frameworks of three issuers. Each framework focuses on one of the

main thematic areas of green ﬁnance in the Association of Southeast Asian Nations (ASEAN)

region,

namely (i) renewable energy, (ii) green buildings, and (iii) forestry.

For each of the main sections of the bond framework, we ﬁrst discuss how gender could

be featured, then we propose any additions or modiﬁcations to the text (with red font).

Explanations tend to be longer for the ﬁrst bond framework, as the same explanations are not

repeated for the second and the third bond frameworks.

BloombergNEF, 2021, supra n. 4.

At the time of writing, our report on this is still not publicly available.

International Capital Market Association (ICMA). (2021). Green Bond Principles: Voluntary process guidelines for

issuing green bonds. https://www.icmagroup.org/assets/documents/Sustainable-finance/2021-updates/Green-Bond-

Principles-June-2021-140621.pdf

ASEAN is an intergovernmental organization of 10 Southeast Asian countries: Brunei, Cambodia, Indonesia,

Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam.

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Integrating Gender Considerations in Green Bonds

We have taken a slightly dierent approach for each of the frameworks to demonstrate that

issuers have ﬂexibility in how they incorporate gender objectives.

Bond 1 – Renewable energy (Sindicatum Green Bond Framework)

The green bond framework can be downloaded here.

Sindicatum Renewable Energy Company (SREC) is a power producer developing, operating,

and acquiring renewable energy generation projects in South and Southeast Asia. In its green

bond framework,

SREC commits to using the proceeds from the bond to ﬁnance or reﬁnance

new or existing renewable energy projects in line with its eligibility criteria. The framework

currently does not include any gender equality or other diversity-related objectives.

Incorporating a gender lens into renewable energy development is essential to ensuring that

women beneﬁt equitably from this rapidly growing industry. Studies to date conﬁrm that

women are under-represented in the renewable energy sector.

The main sections of the framework are the following:

• Our Objectives

• Use of Proceeds

• Process for Project Evaluation and Selection

• Management of Proceeds

• Reporting

OUR OBJECTIVES

This section of the framework outlines SREC’s objectives, provides a high-level overview of

how the bond proceeds will be spent, and includes SREC’s commitment to complying with

the International Capital Market Association’s (ICMA) Green Bond Principles

as well as the

ASEAN Capital Markets Forum’s (ACMA) ASEAN Green Bond Standards.

This introductory section should include the issuer’s commitment to improving gender

equality. The issuer is also advised to share the principles and strategic priorities of its gender

and inclusion strategy that are relevant to the eligible project categories. This is not only

important for creating an overarching gender narrative across the framework but also for

informing the selection of gender criteria in the “Use of Proceeds” section. Other parts of the

framework, such as the “Process for Project Evaluation and Selection” section, often refer to

the issuer’s sustainability objectives.

Sindicatum Renewable Energy Company Pte Ltd. (2017, November). Green bond framework. http://www.

sindicatum.com/wp-content/uploads/2017/12/SREC-Green-Bond-Framework-20171114-final.pdf

International Renewable Energy Agency. (2019). Renewable energy: A gender perspective. https://www.irena.org/-/

media/Files/IRENA/Agency/Publication/2019/Jan/IRENA_Gender_perspective_2019.pdf

ICMA, 2021, supra n. 7.

ACMF. (2018, October). ASEAN Green Bond Standards. https://www.sc.com.my/api/documentms/download.

ashx?id=75136194-3ce3-43a2-b562-3952b04b93f4

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SREC’s gender strategy or any speciﬁc gender- or inclusion-related policies, if there are any,

were not publicly available, and the most recent publicly available sustainability report did not

have any gender-speciﬁc objectives. Therefore, the modiﬁcations proposed here could not be

aligned with SREC’s gender priorities.

We propose that in order to integrate gender in the current “Our Objectives” section, the ﬁrst

sentence could be adjusted as follows (in red):

“The objective of SREC is to grow our portfolio of generation facilities via developing, acquiring,

owning and operating long-term contracted clean power generation facilities in our key markets

that have a long-standing commitment to renewable energy as an integral segment of their power

generation capacity and promote gender equality through the integration of gender considerations

throughout the project’s life cycle.”

USE OF PROCEEDS

The “Use of Proceeds” section is one of the four key components of the ICMA Green Bond

Principles. Its main purpose is to outline the eligible project categories, including the relevant

exclusionary criteria.

This is arguably the most important section when it comes to the integration of gender

considerations in the bond framework. Issuers can include the relevant gender indicators

either as eligibility or exclusionary criteria.

Integrating Gender Equality Into the Eligibility Criteria

Issuers are encouraged to include gender indicators in the eligibility criteria that determine

the type of projects that could be ﬁnanced with the bond.

Issuers can either use the same set of gender indicators across all project categories or ﬁnd the

most appropriate ones for each project category. Often, using the same set of indicators is not

feasible due to the dierent types of investments eligible under the framework. For example,

gender indicators would not be the same for investments in renewable energy developers as

would be the case for direct investments in infrastructure projects.

1) Companies as an eligible investment

In the case of investments in companies, relevant gender indicators could be the percentage

of women in senior management/workforce/board/founders, the percentage of female-owned

business in the supply chain, or the existence of initiatives/policies in place to advance gender

equality in the workplace or on boards. A company is only considered to be an eligible

investment opportunity if it meets the gender key performance indicators (KPIs) outlined in

the “Use of Proceeds.”

Thresholds for the KPIs selected can be determined based on industry and national

benchmarks, international guidelines, and recommendations. They need to be speciﬁcally

tailored for each sector so they stay meaningful and ambitious, but at the same time,

achievable. For example, women’s participation in the workforce is generally less of a problem

in training or consulting ﬁrms than in ﬁnancial services. The KPI thresholds should reﬂect

these dierences as well as the level of ambition of the issuer, as reﬂected in their gender

strategy.

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2) Infrastructure projects as eligible investments

Infrastructure projects are often the recipients of green bond proceeds. Due to the dierent

characteristics of these investments, the gender indicators discussed earlier might not always

be appropriate for them. If this is the case, issuers are advised to either (a) require the

companies involved in the infrastructure project to meet relevant gender targets or (b) require

infrastructure projects to demonstrate an adequate level of gender integration throughout

their life cycle, resulting in the implementation of a gender action plan with appropriate

targets.

When following the ﬁrst approach (a), the issuer would set the eligibility criteria based on

meeting the gender target by the companies involved in the construction, operation, and

maintenance of the infrastructure project. This could mean setting a universal threshold that

applies to all companies involved in the project or setting dierent customized thresholds

depending on the size, type, or role of the company.

Under the second approach (b), eligible infrastructure projects are required to have the

necessary policies and procedures in place to integrate gender considerations across the

project cycle. For example, the project needs to demonstrate that the UN Women

guides

on Integrating Gender into Infrastructure Development in Asia and the Paciﬁc

are implemented

throughout its life cycle. In this case, issuers might need to adjust the indicators depending

on the stages of the project cycle the bond proceeds can be used for. For example, for

greenﬁeld projects, indicators relevant for the design and construction phase should also be

included, while for brownﬁeld projects, indicators would focus only on the operating phase.

The particularities of the dierent infrastructure types should also be considered. The most

appropriate indicators are likely to be dierent for schools than for renewable energy projects,

for example. The indicators selected need to be ambitious compared to industry/sector

standards or relevant national and international benchmarks.

Gender Integration Into the Exclusionary Criteria

There are issuers who either have a lower level of gender ambition or, due to the nature of

their business or area of operation, cannot meaningfully include in their bond framework any

of the gender indicators discussed earlier. In this case, they should at least ensure that the

proceeds from the bond are not used in any activity or investment that would cause harm to

women, worsen gender parity, or impede women’s ability to contribute to society by ensuring

that minimum compliance measures are in place. For example, projects are automatically

excluded unless they have the necessary measures in place to mitigate the risk of sexual and

gender-based violence (SGBV) during construction. These measures could include social

safeguarding requirements on having SGBV-sensitive grievance mechanisms, risk assessments,

action plans, and codes of conduct or simply following the recommendations of the World

Bank’s Addressing Gender Based Violence in Investment Project Financing Involving Major Civil

UN Women is a United Nations entity dedicated to gender equality and women’s empowerment.

UN Women. (n.d.). Guides on integrating gender into infrastructure development in Asia and the Pacific.

https://asiapacific.unwomen.org/en/digital-library/publications/2019/03/guides-on-integrating-gender-into-

infrastructure-development

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Works good practice note

and/or having an Anti-Sexual Exploitation, Abuse and Harassment

policy in place.

In the exclusionary criteria of the “Use of Proceeds” section, issuers can specify what

investments are not eligible under the framework due to the poor gender-related social

safeguarding/minimum compliance measures in place and what their internal process is to

identify and exclude these projects.

In the case of the SREC bond framework, the only eligible project category is “renewable

energy projects,” which includes dierent energy generation technologies such as solar, wind,

waste-to-energy, and bagasse-cogeneration projects. Therefore, all the proceeds from the bond

will go to some type of infrastructure, where SREC can be involved in developing, owning,

and operating the projects.

Gender Integration in SREC’s Eligibility Criteria

Gender can be integrated by adding the following paragraphs after the list of eligible projects:

“Gender considerations must be mainstreamed in all projects ﬁnanced or re-ﬁnanced with the bond

proceeds. This must at least include the following components:

• Gender analysis – examining the roles and activities, resources and constraints, and beneﬁts

and incentives of women and men aected directly or indirectly by the project.

• Gender action plan – outlining recommended activities that address the gender-based

constraints and opportunities identiﬁed during the gender analysis. It includes speciﬁc activities,

targets, responsible actors, and indicators to measure progress and outcomes.

• Gender-sensitive environmental and social impact assessment – assessing the type and scale of

potential impacts caused by the project on nature and society.”

PROCESS FOR PROJECT EVALUATION AND SELECTION

In the “Process for Project Evaluation and Selection” section, the issuer describes the

sustainability objectives of its project categories, the process that is used to determine how

projects ﬁt within the projects categories, and any complementary information on how the

issuer identiﬁes and manages social and environmental risks associated with the projects.

As project selection is governed by the eligibility criteria outlined in the “Use of Proceeds”

section, in most cases, it would be sucient to integrate gender-related targets in that section.

However, gender integration can be reinforced further in the “Process for Project Evaluation

and Selection” by outlining how the project selection process integrates gender equality.

World Bank. (2018, September 28). Good practice note addressing gender based violence in investment project

financing involving major civil works. https://documents1.worldbank.org/curated/en/399881538336159607/

Environment-and-Social-Framework-ESF-Good-Practice-Note-on-Gender-based-Violence-English.pdf

Menon, J. (2019). Guide on integrating gender throughout infrastructure project phases in Asia and the Pacific. UN

Women & UNOPS. https://asiapacific.unwomen.org/-/media/field%20office%20eseasia/docs/publications/2019/03/

ap-bls19062_gpp_web.pdf?la=en&vs=5727

ICMA, 2021, supra n. 7.

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In the case of SREC’s bond framework, the second part of the “Process for Project Evaluation

and Selection” paragraph could be extended the following way (in red):

“Projects will then be further evaluated and selected based on, but not limited to, (i) The Objectives; (ii)

Commercial Feasibility; (iii) Stakeholder Consultation and Impact on the Community; (iv) Risk and

Key Mitigations (v) Environmental, Social and Health and Safety (ESHS) in accordance with IFC

Performance Standards; (vi) Anti-Corruption And Anti-Discrimination Standards; (viii) Potential

Avoidance of GHG Emissions; (ix) Impact on Gender Equality with a Focus on Women’s Economic

Empowerment.”

MANAGEMENT OF PROCEEDS

The “Management of Proceeds” section outlines how the funds raised from the green bonds

are segregated from the issuer’s other resources. This includes describing the operational

process of tracking the proceeds (e.g., crediting them to a sub-account or sub-portfolio) and

how unallocated proceeds are invested while they are waiting to be used for green projects.

Gender criteria can be applied to this temporary placement of unallocated proceeds. Financial

instruments, usually short-term debt, that have a predetermined level of gender performance

would be eligible investment opportunities for these unallocated proceeds. For government

securities, like sovereign bonds, eligibility can be determined based on the issuing country’s

gender equality score, such as the United Nations Development Programme’s Gender

Inequality Index.

Similarly, when investing in corporate securities (e.g., commercial paper),

the company’s gender performance ranking could be a simple way to assess corporate gender

performance. Table 1 includes some of the most prominent gender indices and rankings for

both corporates and countries.

Table 1. Gender indices and rankings

Gender indices and rankings Description

Bloomberg Gender-Equality

Index

“It tracks the ﬁnancial performance of public

companies committed to disclosing their efforts to

support gender equality through policy development,

representation and transparency.”

Equileap Gender Equality Data

and Ranking

“It is a comprehensive set of ratings and raw data

points that covers a variety of gender equality metrics.

The database covers all main developed markets,

including the MSCI World, Russell 1000, S&P 500 and

STOXX 600 indices. It has assessed 3500 companies

in 23 countries.”

United Nations Development Programme. (n.d.). Gender equality index. http://hdr.undp.org/en/content/gender-

inequality-index-gii

Bloomberg. (n.d.). Gender-equality index. https://www.bloomberg.com/gei

Equileap. (2021). Gender equality data. https://equileap.com/data/

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Gender indices and rankings Description

World Economic Forum Global

Gender Gap Index

“It measures the extent of gender-based gaps in

countries among four key dimensions: Economic

Participation and Opportunity, Educational

Attainment, Health and Survival, and Political

Empowerment. … It benchmarks 153 countries and

provides country rankings that allow for effective

comparisons across and within regional peers.”

Impax Global Women’s

Leadership Index

“It is a broad-market index of the highest-rated

companies in the world for advancing women’s

leadership, as rated by Impax Gender Analytics,

and that meet threshold environmental, social and

governance standards.”

Integrating gender criteria as outlined above might not be appropriate for every issuer.

Unallocated proceeds need to be invested in ﬁnancial instruments that are very liquid and

have low volatility; otherwise, the issuer might not be able to quickly access the funds to

reallocate them to green projects. Issuers should exercise caution when limiting eligible

investments this way in emerging countries, where the choice of liquid short-term debt

securities is limited. Also, gender integration should not create additional ﬁnancial risks to

the issuer by forcing it to invest in another currency than what the unallocated proceeds are

denominated in.

For example, SREC has used this green bond framework to issue bonds denominated in

Indian rupees (INR) and Philippine pesos (PHP). In the case of the latter, probably SREC’s

only choice is to invest the unallocated proceeds into government securities issued by the

Philippine government. While there are more INR-denominated investment opportunities

available for the proceeds of the INR green bond, introducing any gender criteria would still

limit the issuer’s choices considerably. On the other hand, for a USD-denominated bond, for

example, the choice of liquid money market instruments would be signiﬁcantly wider, so

the integration of gender criteria in the selection of these short-term securities would be

recommended.

An alternative to binding gender criteria would be to have a “soft” commitment from the

issuer to take gender into consideration when investing the unallocated proceeds from the

green bond. The SREC bond framework could reﬂect this by modifying the last sentence of

the “Management of Proceeds” section the following way (in red):

“Any unallocated proceeds may be deployed at the Company’s discretion in cash or cash equivalent

instruments, in accordance with the Company’s investments and treasury policy. The Company will

prioritize issuers with above-average gender performance.”

World Economic Forum. (2020). Global gender gap report 2020. http://www3.weforum.org/docs/WEF_

GGGR_2020.pdf

Impax Asset Management. (n.d.). Impax Global women’s leadership index. https://impaxam.com/assets/pdfs/pax-

ellevate-fund/index-fact-sheet.pdf?pwm=5187

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REPORTING

As per the ICMA Green Bond Principles, issuers are expected to disclose up-to-date

information on the use of proceeds, including the list of projects with their expected and

achieved impacts.

The issuer should report on how it has complied with the gender criteria integrated

throughout the framework. The “Reporting” section of the SREC’s framework could be

adjusted to reﬂect this (in red):

“Until full allocation, the Company will disclose on an annual basis:

i. total amount of proceeds allocated to Eligible Green Projects (on a portfolio basis);

ii. the list of Eligible Projects to which the proceeds have been allocated (or reallocated);

iii. a brief description of the Eligible Projects, and their expected impact (inclusive of, but not

limited to, installed capacity, electricity generation, GHG emissions reductions, and gender

equality);

iv. its conﬁrmation that the use of proceeds, are consistent with SREC’s Green Bond Framework.”

Bond 2 – Green buildings (Arthaland Green Bond Framework)

The green bond framework can be downloaded here.

Arthaland Corporation (ALCO) is a real estate developer based in the Philippines. All

buildings constructed by ALCO aim to achieve both national and international green building

certiﬁcations, demonstrating the company’s commitment to tackling climate change. ALCO

published its green bond framework for the building and development of green buildings in

2019.8

According to the World Green Building Council, nearly 50%, or 13, of the 28 heads of

established Green Building Councils are women.Despite this, the sector does not prescribe

any speciﬁc gender equality standard to be applied across the supply chain. Most of the

sustainability standards are voluntary and require the supply chain to meet basic human rights,

worker health, and safety regulations, with no explicit focus on gender equality. It is therefore

important to establish appropriate gender equality considerations within individual bond

frameworks to ensure inclusivity and safety.

To ensure social safeguarding and responsible supply management, the issuer should set

voluntary standards. A report funded by the Dutch government

provides a framework to

integrate gender equality considerations into supply chain ethical requirements. An example is

mandating gender-sensitive grievance procedures to process complaints. The following change

could be made to the framework (in red):

BSR. (n.d.). Gender equality in codes of conduct guidance. https://www.bsr.org/reports/BSR_Gender_Equality_in_

Codes_of_Conduct_Guidance.pdf

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“This Framework outlines the criteria and guidelines for the allocation of proceeds of green ﬁnancing

instruments as per the following standards:

• International Capital Market Association (“ICMA”) Green Bond Principles 2018

• ASEAN Capital Markets Forum ASEAN Green Bond Standards 2018

• Loan Market Association, Asia Paciﬁc Loan Market Association and Loan Syndications and

Trading Association Green Loan Principles 2018

In addition to the above standards, the framework also seeks to uphold a mandatory “Supplier Code

of Conduct” established by the company to respect human rights, environmental sustainability, gender

equality, and business integrity throughout the supply chain. Any supplier working with ALCO should

have to meet the requirements of this code to supply goods/services to the company.

USE OF PROCEEDS

Gender Integration Into the Eligibility Criteria

The eligible use of proceeds is aligned with the following environmental objectives:

climate change mitigation, promotion of green buildings, and environmentally sustainable

management of land. The proceeds also contribute to the United Nations’ Sustainable

Development Goal (SDG) 11 on sustainable cities and communities and SDG 13 on climate

action.

In addition to the two SDGs mentioned, the framework can also contribute to SDG 5 on

gender equality. This can be done by requiring that all projects to have a gender action

plan (GAP) with project-speciﬁc gender SMART

targets. Projects that do not have a

GAP developed during their project proposal phase should be ineligible to receive the bond

proceeds. This will encourage all relevant stakeholders to consciously work toward the

promotion of gender equality and, at a bare minimum, to ensure they “do no harm.”

Gender Action Plan

Gender mainstreaming is fundamental to any project and does not necessarily signify

additional costs; instead, it could increase the eciency and eectiveness of the project.

The development of a GAP introduces gender considerations into critical decision-making

elements like the allocation of resources. Gender considerations should be integrated at all

stages of the project’s life cycle. An initial gender and social assessment should be included

with the funding proposal. This high-level assessment at an early stage will identify clear

objectives and assign accountability among the stakeholders involved.

To integrate the gender considerations discussed above, the following modiﬁcation to the

framework can be made:

SMART: specific, measurable, achievable, realistic, and time-bound

Green Climate Find. (n.d.). Gender. https://www.greenclimate.fund/projects/gender

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“The eligible use of proceeds contribute to three main environmental objectives, i.e. climate change

mitigation, promotion of green buildings and environmentally sustainable management of land. For

a project to be eligible for proceeds, a gender action plan is to be submitted, consisting of the following

components with the funding proposal:

• Preliminary gender analysis: A gender equality analysis of the region, country, or project area,

as well as actions required to address any shortcomings and risks, including SGBV.

• Planned steps: On the basis of the preliminary gender analysis, steps for mitigating social

safeguarding risk and building on opportunities for promoting gender equality for economic

empowerment and/or transformational change can be planned. This project-planning process

will require issuers to determine the following based on the local context:

Relevant gender performance indicators

Sex-disaggregated targets set with reference to sex-disaggregated baseline data collection

Timelines

Responsibility lines

Budget against each proposed activity.”

Gender Integration Into the Exclusionary Criteria

The framework excludes several unsustainable activities, including fossil fuel generation and

trade in weapons and munitions, tobacco, alcoholic beverages. Forced labour and unfair

labour practices are also prohibited.

It is also critical to exclude projects that fail to fulﬁll minimum gender considerations from

the selection process. These “minimum considerations” should be designed to suit the local

context. Some potential considerations to assess include gender balance within teams, women

in leadership positions, equal wages for women, special requirements like the availability of

childcare at the place of work, the availability of job-speciﬁc ﬂexible work policies, and paid

maternal leave.

“The following projects/activities are ineligible for the use of proceeds under this Framework:

1. Projects/activities that fail to fulﬁll minimum gender considerations

2. Fossil fuel power generation...”

THE PROCESS FOR ASSET EVALUATION AND SELECTION

The projects ﬁnanced or reﬁnanced through the framework must comply with the eligibility

criteria established by ALCO’s Sustainability Committee, comprised of members of

various departments. The total number of members and members per department on

this Sustainability Committee is unknown; however, it is imperative to ensure female

representation on the committee. The following modiﬁcation can be made to the framework:

“Projects ﬁnanced and/or reﬁnanced through the Framework are evaluated and selected based on

compliance with the eligibility criteria by ALCO’s Sustainability Committee which is composed of

members of the following departments within ALCO: (1) Business and Project Development; (2)

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Technical Services; (3) Property Management; (4) Finance (5) Sustainability and (6) Strategic

Funding and Investments. ALCO’s Sustainability Committee will hold regular consultations with

other parties within the organization or third parties to be nominated as subject matter experts as may

be required. To ensure representation of women on the committee in order to present a diverse range of

perspectives, gender-balanced representation on the committee should be aimed for, if not: a minimum

of 30% female representation should be ensured.”

MANAGEMENT OF PROCEEDS

Use of Unallocated Proceeds

The framework mandates the internal tracking and monitoring of the allocation of net

proceeds. Any unallocated proceeds are permitted to be deployed in cash/cash equivalent

instruments in accordance with ALCO’s Strategic Funding and Investment Policy. The

framework also clariﬁes that the exclusionary criteria apply even to the unallocated proceeds.

The exclusionary criteria that “excludes projects failing to meet minimum gender equality

considerations,” as discussed earlier, should be applied for unallocated proceeds too. This way,

issuers are incentivized to have a clear and deﬁned plan to encourage gender equality during

the various life cycles of the project.

REPORTING

At present, the framework mandates reporting upon two indicators—allocation and impact.

a. Allocation Reporting:

The allocation is transparently reported upon to ensure that the net proceeds are spent

toward the Eligible Green Portfolio.

In addition, issuers should report on gender indicators based on the local context and

scope. The following gender indicator could be integrated in the framework:

“The allocation report will provide:

• Amount or percentage of allocation to the Eligible Green Portfolio

• Percentage of net proceeds allocated to ﬁnancing new and existing projects, including

the share of reﬁnancing reported at the category level

• Examples of projects being ﬁnanced (subject to conﬁdentiality considerations)

• Balance of unallocated proceeds

• Initiatives funded to improve gender equality during the project design, construction,

and/or ongoing operations and maintenance phases.”

b. Impact Reporting:

ALCO seeks to report on the environmental impacts of the projects funded under

the framework. In addition to environmental impact, it is also imperative to report

the impact on gender equality before and after the bond issuance. his will not only

increase the accountability of the issuer, it will also ensure that meaningful initiatives

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Integrating Gender Considerations in Green Bonds

are designed and implemented with relevant gender considerations. Relevant

indicators to include in the framework are:

“The impact report may provide relevant indicators, for example (can be one or more):

• Green buildings: type of certiﬁcations and number of buildings in each type, estimated

annual reduced and/or avoided emissions in tons of CO

equivalent vs. the city/country

benchmark

• Evidence of types of incentives and targets designed to recruit and retain women;

increase their capacity, especially in non-traditional roles; and provide career

development support to move into leadership roles.

• Number/percentage of women who receive gender-sensitive training provided by the

program/project and are subsequently placed in jobs/provided with access to ﬁnance

if self-employed, for example, via vocational training and skill workshops, safety and

awareness drives.”

Bond 3 – Forestry (PTT Green Bond Framework)

The green bond framework can be downloaded here.

PTT Public Company Limited is a Thai national energy company established to ensure energy

security for the country.

The company has a strong commitment to pursuing sustainable

development and beneﬁting society at large. Its business strategy emphasizes participation in

social and environmental care while catering to various stakeholders.

The company released its green bond framework in 2020, aiming to implement the

sustainable management of natural resources and land use. The framework targets

reforestation as the sole eligible project category. In other words, 100% of the net proceeds

from the green bond will be used exclusively to ﬁnance or reﬁnance reforestation projects.

Through the issuance of bonds, Thailand aims to ﬁnance the PTT Restoration Project that

seeks to restore various forest areas that were earlier encroached upon and destroyed. The

project also aims to promote sustainability among urban and local communities.

Local communities play a vital role in the sustainable management of forests. Studies

have disclosed that women of forest communities play a key role in the management and

conservation of the area.

Despite this, forestry is often recognized as a male-dominated

sector.

Women are often discriminated against in their access to economic opportunities

and control over forest resources, owing to a range of interrelated cultural, socio-economic,

PPT. (n.d.). Our company. https://www.pttplc.com/en/About.aspx

Catacutan, D. & Naz, F. (2015). Gender roles, decision-making and challenges to agroforestry adoption in

Northwest Vietnam. International Forestry Review, 17(S4).https://www.jstor.org/stable/26431618

Paez Valencia, A. M. (2020). Implementation of gender responsive research in development projects. World

Agroforestry guidance note. https://apps.worldagroforestry.org/downloads/Publications/PDFS/TN21031.pdf

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Integrating Gender Considerations in Green Bonds

and institutional reasons.

As a result, there is a lack of female representation in forest

management and other labour associations, which directly impacts their decision-making

power and ability to voice their concerns. It is therefore critical for projects to integrate gender

considerations within green bond frameworks. This will encourage gender sensitization among

the various stakeholders and facilitate equality in labour and opportunities for women.

Gender equality considerations can be included under various sections and aligned

throughout the framework to be most eective, as demonstrated in the next section.

STRATEGIC DIRECTION AND MISSION TO SUSTAINABLE DEVELOPMENT

The business strategy of the company follows a 3P principle:

• Prosperity: The company clearly emphasizes the need to contribute to the economy by

working at the policy level to beneﬁt society at large.

• People: An emphasis on human resources, community, and social development aims to

strengthen the community’s capability for self-reliance.

• Planet: Natural resource and environmental conservation is encouraged by creating

awareness and fostering cooperation among various sectors.

While the framework already acknowledges the importance of community development,

it does not speciﬁcally address gender inequality. It is important for gender equality

considerations to be explicitly included in the “Strategic Direction and Mission to Sustainable

Development” section of the framework to facilitate a more sensitized and inclusive mindset.

It can be done by a subtle change in the wording in the “People” section:

“... In addition, a diverse organizational model and agile human resources management will enable

PTT Group to eectively address changing business operations as well as care for societies and

communities, especially for women and other vulnerable groups of society. This will be achieved through

a focus on inclusive development and building quality livelihoods and strong economy for individuals

in society.”

PTT’S COMMITMENT TO THE UNITED NATIONS SDGS

The framework highlights its commitment to pursuing the UN SDGs that are aligned with

Thailand’s National Strategy. The framework outlines seven goals, including SDG 7 on

aordable and clean energy and SDG 8 on decent work and economic growth, among others.

In addition to the seven SDGs, SDG 5 on gender equality can be added to demonstrate

the issuer’s commitments to gender inclusiveness. While SDG 5 is cross-cutting and covers

a variety of goals and indicators, UN Women has also developed more critical priorities in

response to the COVID-19 pandemic.

Targets include practicing an equal share of work and

building data and coordination mechanisms to include gender perspectives. The addition of

FAO. (2013). Forests, food security and gender: Linkages, disparities and priorities for action. Background paper for

the International Conference on Forests for Food Security and Nutrition, FAO, Rome, 13–15 May, 2013. http://www.fao.

org/3/mg488e/mg488e.pdf

UN Women. (n.d.). UN Women response to COVID-19 crisis. https://www.unwomen.org/en/news/in-focus/in-

focus-gender-equality-in-covid-19-response/un-women-response-to-covid-19-crisis

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similar targets and priority areas in the context of agroforestry will empower women in the

workforce.

USE OF PROCEEDS

Proceeds from the bond will be used to ﬁnance or reﬁnance long-term forest conservation

projects and Environmental Learning Centers. Projects also need to meet the Climate

Bonds Initiative’s Forestry Criteria. Since there is no global standard for gender equality in

infrastructure yet, following established global best practices is encouraged. These practices

will sensitize project stakeholders to the needs of both female employees and female end-users

of the project. The following modiﬁcation can be made to the framework:

“In addition to the eligible criteria, the selection of the projects will also be based on Climate

Bonds Initiative (CBI) ’s Forestry Criteria as PTT has the intention to comply and obtain

the Certiﬁcation from Climate Bonds Initiative (CBI) for PTT’s Green Bond. PTT also

seeks to apply global best practices recommended for enhancing gender equality and empowerment in

infrastructure by the United Nations for Project Services (UNOPS),

the United Nations Economic

Commission for Europe (UNECE),

and other organisations.”

To implement this – two approaches to gender integration can be applied:

a. Bottom-up approach:

This approach is based on the inclusion of a GAP, as discussed earlier. The GAP

involves a thorough gender analysis followed by clear steps and targets to improve the

gender equality performance of the projects ﬁnanced with the proceeds. The Food and

Agriculture Organization of the United Nations (FAO) released a practical guide on

mainstreaming gender in forestry.

One of the ﬁrst steps that the guide recommends

is conducting a gender analysis for the project to better understand the practical

and

strategic

needs of women. Building on the ﬁndings of this gender equality assessment,

gender-responsive activities should be designed, and related targets should be set.

Furthermore, obstacles hindering the achievement of gender equality should be clearly

Morgan, G., Bajpai, A., Ceppi, P., Al-Hinai, A., Christensen, T., Kumar, S., Crosskey, S., & O’Regan,

N. (2020). Infrastructure for gender equality and the empowerment of women. UNOPS. https://content.

unops.org/publications/UNOPS-Infrastructure-for-Gender-Equality-and-the-Empowerment-of-women.

pdf?mtime=20200701120805

United Nations Economic Commission for Europe. (n.d.). Mission. https://unece.org/gender-responsive-

standards-initiative

FAO & RECOFTC. (2016). Training manual: Mainstreaming gender into forestry interventions in Asia and the

Pacific. http://www.fao.org/3/i5866e/i5866e.pdf

Practical gender needs of women (PGNs) are “needs that women identify in their socially accepted roles in

society.” European Institute for Gender Equality. (n.d.). Practical gender needs of women. https://eige.europa.eu/

thesaurus/terms/1323

Strategic Gender Needs (SGNs) are “what men or women require to improve their position or status with

regard to each other by placing them in greater control of themselves instead of limiting them to the restrictions

imposed by socially defined roles.” European Institute for Gender Equality. (n.d.). Strategic gender needs of women

(SGNs). https://eige.europa.eu/thesaurus/terms/1397

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Integrating Gender Considerations in Green Bonds

identiﬁed, and a gender-sensitive monitoring and evaluation plan should be developed

with appropriate indicators and targets.

a. Top-down approach:

Establish a sustainability committee that decides the eligibility and selection criteria

of the projects. In the case of PTT, the eligibility criteria are limited as the net

proceeds will be used exclusively for ﬁnancing the reforestation of speciﬁc Thai

forests. Therefore, it is recommended to have a “Gender Expert” on the sustainability

committee to analyze the situation and develop a GAP for the projects that include

gender equality policies and customized indicators and targets. The Gender Expert

may or may not be a local; however, they should have a proven track record of working

on forestry projects and follow a consultative process involving a wide range of

stakeholders, including traditionally marginalized women.

Gender Performance Indicators

The bond framework currently only reports on indicators relating to carbon emissions and

green/forest areas. However, to make the framework more gender-sensitive, the following

indicators with set targets should be integrated and modiﬁed to best suit the local context.

Some potential indicators suggested by the FAO that could be included in the framework

include:

• Proportion of annual household income (or consumption) derived from agroforestry or forest

activities (disaggregated by the sex of the household head).

The calculation of this metric is critical since about 50% of women in Thailand work

in vulnerable employment.

This adversely impacts their ﬁnancial independence and

security and increases their reliance on male counterparts of their family and outside.

The inclusion of this indicator encourages issuers to design their forestry projects with

the overarching objective of beneﬁting women ﬁnancially. This will encourage project

supervisors to employ more women, develop women-friendly workplace policies,

and oer facilities aimed at attracting and retaining female employees (e.g., gender-

appropriate washrooms, childcare centres, etc.).

• Number of men and women beneﬁting from employment opportunities as a result of natural

resource management initiatives.

• Number of women beneﬁting directly/indirectly from the project.

Sustainable ﬁnance instruments like green bonds can act as catalysts to provide

beneﬁts to women, either directly or indirectly, through various projects. The beneﬁts

could be in the form of employment, dissemination of technical expertise and know-

how, and vocational training, among many others.

Flejzor, L. (2016). How to mainstream gender in forestry: A practical field guide. FAO. http://www.fao.org/

documents/card/en/c/8c026747-2ace-42cb-89e7-52555c58ea8d/

FAO & RECOFTC, 2016, supra n. 33.

UN Women. (2020). The state of women’s economic empowerment in the Indian Ocean rim: Country snapshot:

Thailand. https://interactive.unwomen.org/multimedia/infographic/economicempowermentindianocean/en/thailand.

html

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Integrating Gender Considerations in Green Bonds

• Level of satisfaction among women and men with access to quality facilities, extension, and

training.

Reforestation is usually a long-term commitment with several project life cycles. It is

therefore important to initiate valuable developments that have a lasting impact on the

welfare of women even after the life of the project. Some transformational initiatives

could include support for the development of women’s organizations for collective

strength and increased voice. Other initiatives could be increasing access to essential

facilities like washrooms; healthcare facilities like mobile clinics and pharmacies; and

educational institutions for girl students, disseminating training and skill workshops

on ﬁnancial management; among others. The size and scope of these initiatives can be

directly proportional to the size of the project/bond issued.

MANAGEMENT OF PROCEEDS

Eligible projects and assets will receive net proceeds from the bonds within 24 months of bond

issuance. Any proceeds unallocated are held in PTT’s internal treasury cash accounts until

they are allocated. The following modiﬁcation can be made to the framework.

“...For the unallocated portion, the proceeds will be held either in cash or cash equivalents in internal

treasury cash account until allocated. Minimum gender considerations will be applied to the

unallocated proceeds to ensure gender-smart application.”

REPORTING

Proceeds Allocation Reporting

The issuers are mandated to report their performance on the use of proceeds on a project-

by-project basis every year until the maturity of the bond. Reports can include summaries of

projects ﬁnanced by green bonds, how proceeds from green bonds are allocated to selected

green projects, and unallocated proceeds.

In addition to these indicators, it is necessary to introduce other indicators to assess gender

performance.

“PTT will update Allocation Reporting until the earlier of the maturity of Green Bond or the proceeds

are fully allocated. The report will include a summary of the projects to which Green Bond proceeds

has been allocated. The report may include the followings:

• Brief description and summary of projects ﬁnanced by Green Bond.

• Summary of the allocation of proceeds raised via Green Bond issuance to ﬁnance and/ or

reﬁnance selected green projects

• Summary of unallocated proceeds

• Number of (or percentage of) men and women actively participating in natural resource

management, measured before and after the activity.”

Manfre, C. & Rubin, D. (2012). Integrating gender into forestry research: A guide for CIFOR scientists and

programme administrators. Centre for International Forestry Research. https://www.cifor.org/publications/pdf_files/

Books/BCIFOR1203.pdf

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Other indicators mentioned earlier should also be reported upon:

• Level of satisfaction among women and men about access to and quality of facilities, extension,

and training.

• Number of men and women beneﬁting from employment opportunities as a result of natural

resource management initiatives.

• Number of women beneﬁting directly/indirectly from the project.

• Proportion of annual household income (or consumption) derived from agroforestry or forest

activities (disaggregated by the sex of the household head).

Furthermore, to ensure that the use of proceeds is tracked accurately, each of the indicators

should be reported correctly. This will require a social, gender-focused baseline and end-line

survey to be undertaken by an independent monitoring and evaluation provider. To encourage

greater ambition among issuers, the “growth” or increase in female welfare and, more

importantly, women’s empowerment calculated based on the survey and annual reporting

regarding gender indicators and targets should also be reported. This will allow adaptable

monitoring and the introduction of mitigation measures or course correction if the gender-

related targets are not being met.

Conclusion

One of the challenges of integrating gender considerations in green bond frameworks is how

to determine gender criteria that are relevant and applicable across eligible projects. For the

sake of simplicity, we have selected bond frameworks with a single project category. Despite

this, identifying speciﬁc gender indicators proved to be dicult. Bond frameworks are

normally used for multiple bond issues and therefore need to be written in a way that they

provide enough ﬂexibility to issuers in project selection. For example, the SREC’s framework

intentionally kept the type of eligible projects vague: “All net proceeds from the issuance of

Green Bonds by SREC will be allocated to reﬁnancing and/or investments in a portfolio of

renewable energy projects including, but not limited to, the following Eligibility Criteria.”

Without knowing the exact nature, type, and location of the project, it is dicult to choose a

gender indicator that will always be relevant. For example, an ambitious gender equality target

during construction for a solar project in Thailand might be dierent than the one for a waste-

to-energy project in Malaysia. Therefore, the gender component of a green bond framework

usually needs to be in the form of a general, high-level requirement on gender integration,

such as undertaking gender analyses and the development of gender action plans and making

ongoing reporting on their implementation mandatory. Of course, in the case of other types

of sustainability debt, such as sustainability bonds and sustainability-linked bonds, speciﬁc

gender indicators would play a much more prominent role in the framework.

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Appendix

Gender Indicators

Table A1 provides examples of gender indicators and their corresponding eligibility criteria.

They are based on the 2X Challenge,

which is a major initiative of G7 development

ﬁnance institutions to mobilize resources to advance gender equality and women’s economic

empowerment.

Table A1. Gender indicators and eligibility criteria

2X Challenge

gender indicator