Gender equality-focused sustainable bonds secured strong endorsement from a wide range of market participants in Asia as recognition of their key climate transition role matures. Ahren Lester writes

‘Orange bonds’ – focused on gender equality projects – have begun to gain traction in Asia, as issuer and investor interest looks ready to be matched by issuance.

Audience questions around orange bonds featured prominently throughout the day during the Sustainable Debt Asia 2025 event in Singapore. Outside the event, Environmental Finance conversations with banks, investors and other market participants around the conference saw the theme raised consistently.

For Natasha Garcha – who is innovative finance and gender-lens investing specialist at Impact Investment Exchange (IIX), which has led pioneering work on ‘orange’ debt – this was a strong confirmation of what she has been seeing in the region.

“Asia is really showing leadership on orange bonds,” Garcha told the Sustainable Debt Asia event. “There are orange bonds in other parts of the world, but Asia is setting the pace.”

The bonds are named after UN Sustainable Development Goal number five, which focuses on achieving gender equality and empowering all women and girls by 2030, and has been given an orange colour in a colourful pie chart graphic depicting the goals.

IIX has been the standard-bearer for this nascent label through its ground-breaking Women’s Livelihood Bonds (WLBs) programme launched in 2017 as well as its leading work on the industry-led committee which developed the Orange Bond Principles (OBP) in 2022.

In 2023, IIX raised $100 million from its largest WLB to date. This took the total it has raised through its six WLBs to date to more than $228 million. IIX has already announced it plans to come to market with its “largest issuance yet” in 2025, with its seventh WLB.

The region has seen other ‘orange bonds’ from issuers including Turkish lender Akbank and Filipino microfinance not-for-profit ASA Philippines.

More issuance to come

Issuers in the region are already lining up to integrate this theme into their core financing activities.

Bangladesh, for example, has announced plans to issue sovereign ‘orange’ bonds after launching work on the project in November. The country plans to raise $1 billion from multiple orange bond issuances to support gender equality projects across key sectors including garments, green infrastructure, and agriculture.

“Asia is really showing leadership on orange bonds… Asia is setting the pace” – Natasha Garcha, IIX

“The [orange bond] market is starting to become really interesting,” IIX’s Garcha said. “For instance, Indonesia – which was a pioneer in green sukuk – has been working on integrating ‘orange’ into its green bond and sukuk framework. So, we are going to see more of these sovereign [orange bond] issuances from there.”

“And the most exciting part for me is that corporates are now picking it up,” Garcha added. “We have a large Japanese corporate that is looking at integrating ‘orange’ into a sustainability-linked bond (SLB) framework. And this is not just focused on putting women on the board – although it started with that thinking – but looking at women across their supply chains and across their workforce.”

Garcha said target-based SLBs could be a “fantastic” asset class in which to incorporate gender – a point other market participants have highlighted in the past.

Investor demand

Yet there is more investor demand for impactful social bond issuance, such as ‘orange’ bonds, than there is supply.

“We cannot get enough social issuance, even close relative to our demand,” said Manulife Investment Management Asia Pacific sustainability lead Eric Nietsch. “So, the capital and the demand is there. And I think within social – whether it comes with another label or not – we would love to see more gender-themed social bonds.”

This mirrors comments from other major sustainable debt investors in recent years. For example, Fidelity International (FIL) said orange bonds were an exciting innovation that “will have their day” even if they have not yet been investable.

The challenge is that it is not yet at the scale required to meet that demand. For example, Nietsch said the IIX Women’s Livelihood Bonds (WLBs) are fantastic orange bond transactions but not big enough for an investor like Manulife to invest in. Indeed, even the debut sovereign gender bond from Iceland in 2024 was only €50 million ($59 million) in size.

With investor demand apparent, Nietsch said: “The question is: how do we increase the supply?”

“We cannot get enough social issuance even close relative to our demand [and] we would love to see more gender-themed social bonds” – Eric Nietsch, Manulife IM

The many banks providing loans to small- and medium-sized enterprises (SMEs) are a potentially significant source of gender-related sustainable financing potential. Many gender-focused sustainable bonds from banks have focused on SME lending to women-owned or founded companies.

S&P Global Ratings Asia Pacific sustainable finance head Bertrand Jabouley explained this was partly because it was “quite clear” when these smaller businesses satisfied the gender criteria for such financing, such as share of capital owned by women or female representation at board or management level.

‘Tricky’ topic

But Jabouley said this clarity around meeting the necessary criteria can quickly disappear as companies get larger.

Manulife IM’s Nietsch agreed it can be “tricky” to focus on gender in finance among larger businesses. But it is also tricky even for smaller firms, but evidence is growing of how valuable both from an impact and returns perspective this work can be.

“The problem is that when you have a corporate client, it is not always clear if it is female-run or founded,” Nietsch said. “You do not necessarily know the gender of a corporation or assigning gender to it is difficult. There are ways to do it, and I think one step is gender disaggregation of that [corporate] data.”

Nietsch said some banks have done the “technical groundwork” for this in order to focus attention on identifying and targeting this gender-related impact finance. Those that have to date have often found it is a “very high-returning lending product.”

Of course, gender equality is being integrated into sustainable debt instruments even without a dedicated ‘orange bonds’ label, and there is caution about introducing another label to the market.

IIX: Social Bond Principles ‘just not enough for us’

Although there is some market reticence to see sustainable bond labels proliferate, IIX has argued there is a clear case to be made for gender equality-focused bonds issued using the dedicated Orange Bond Principles (OBP).

All of its Women’s Livelihood Bonds (WLBs) have aligned with the International Capital Market Association (ICMA)-administered Social Bond Principles (SBP) – the most widely used guidance for ‘social bond’-labelled transactions.

Under the SBP, ‘orange’ projects are primarily eligible under one of 10 identified target populations: ‘Women and/or sexual and gender minorities’.

But IIX’s Garcha said that these necessarily broad principles and target populations were “just not enough for us”, considering women are a discriminated group which represents half of the population.

Investor response to the ‘orange bond’ label under the OBP suggests this is a feeling shared by them as well, she argued. With the last two WLBs, for example, IIX has also used the OBP to affix an ‘orange bond’ label to the transaction.

“What was really interesting is that the first time we used the orange bond label for the WLBs, our bonds were oversubscribed,” she said. “This was because investors could understand what they were buying [through this orange bond].”

“We see many structures with use of proceeds related to loans specifically directed to women-controlled SMEs,” S&P’s Jabouley said. “We see also sustainability-linked instruments with KPIs around female representation in decision-making bodies of issuers.

“So, to that extent, I am not sure that we need another label for ‘orange’ bonds. Another colour may just add complexity to the market, because we have seen many transactions [with gender dimensions] – especially out of India, for instance – which have been very successful.”

A lot of gender-focused investment impact can be delivered without having to resort to labelled ‘orange’ debt.

“Most of our work on the topic happens through stewardship and engagement, where we have been reasonably successful,” Manulife IM’s Nietsch said. “Actually, we have seen big changes in markets like Hong Kong – and I would argue that in Japan things are starting also to move.

“But how you get that from the board into something that is more pervasive through an issuer, and that they then can come to market [with an orange bond]. It is a little bit tricky.”

‘Honing in’ value

There is still a wide appreciation of orange-labelled bonds, however (see Box). ANZ international sustainable finance head Stella Saris Chow said the gender element is a “really important theme” for Asia – especially Southeast and South Asia – so, specifically focusing attention on this theme is valuable.

“What we have seen with the OBP and the WLB series – especially the last couple of WLBs – is that, by having a dedicated [orange bond] label, really hones into the underlying topic and gives it focus. And, actually, gender bonds – and social bonds more generally – also have an impact on other topics like climate as well.”

IIX’s Garcha highlighted her own research which shows gender equality – alongside factors such as wealth and democracy – is actually one of the “highest predictors” of whether a country is more or less climate adaptive.

“Having a dedicated [orange bond] label … really hones into the underlying topic and gives it focus” – Stella Saris Chow, ANZ

“This is because women collectively spend 250 million hours collecting water. It is because women grow 70% of the food we eat. It is because women are the primary household-level decision makers of energy and transportation use,” she said.

“So, we are not going to have a transition – forget a ‘just transition’ – without half the world. The Orange Movement is really just shifting the whole idea of the just transition to where you are helping women by recognising the transition itself should not be looking at women as victims, but as solutions.”

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