Gender-Focused Debt Is Expanding but Will Continue to Be a Specialised Label Within the Sustainable Debt Market Through 2026

Orange Bond Label Use Is Growing but Will Remain Niche

The market for orange bonds is nascent but gradually expanding, particularly in emerging markets. The orange label is designed for a specific purpose, so while issuances may rise as more investors seek scaleable solutions and companies prioritise social issues, including gender­related topics, they will likely continue to play a niche role.

Orange bonds are gender-focused fixed-income instruments that channel capital to projects advancing gender equality and women’s empowerment while targeting competitive risk­adjusted returns. They build on the Orange Bond Principles (OBP), launched in 2022. These set standards for use of proceeds (UoP), transparency and impact measurement, requiring a clear gender thesis, credible governance and reporting on outcomes often with gender­disaggregated data. Sustainable Fitch is a verified external reviewer of orange-labelled bonds.

Gender-Related Projects Eligible for Financing

Eligible activities typically include financing women-owned or women-led enterprises, improving access to essential services for women and girls, and supporting inclusive value chains, among others. Issuers can be sovereigns, supranational organisations, corporates, or financial institutions, and structures generally align with ICMA Social or Sustainability Bond Principles, including external reviews and impact reporting.

The OBP was developed by the Orange Bond Initiative, a global coalition which includes Impact Investment Exchange (IIX) and other members, including development finance institutions. !IX was the first issuer of orange bonds, with the first bond verified in 2022.

Nine such bonds have been issued since January 2020, according to I IX’s transactions database. Issuance totals about USD1.5 billion, with individual ticket sizes of USD12 million to USD980 million. The bonds predominantly target emerging or developing markets such as Guatemala, Sri Lanka, Indonesia, Cambodia, and Vietnam, as well as broader regions, including south Asia, southeast Asia, and sub-Saharan Africa.

Most recently though, Japanese company Itochu Corporation issued what it claims is the country’s first orange bond, demonstrating how the label can be adopted across developed markets as well. The proceeds will support:

1. Establishing long-term gender-inclusive workplaces;
2. Investment in and procurement of products from companies that promote women’s advancement; and
3. Companies that provide services and products contributing to gender equality, including investments in Femtech businesses and the procurement of Femtech products.

Case Study: Impact Investment Exchange’s Women’s Livelihood Bond (WLB)

Sustainable Fitch provided a Second-Party Opinion on IIX’s WLB Series framework, concluding alignment with ICMA’s Green Bond Principles, Social Bond Principles, and Sustainability Bond Guidelines, as well as the Orange Bond Principles. We assigned an overall ‘Excellent’ rating to the framework.

The framework addresses all core pillars – UoP, project evaluation and selection, management of proceeds, and reporting. The issuer expects all proceeds under this framework to support social outcomes, while between 25% and 30% of proceeds will also support positive environmental outcomes The framework applies social criteria across all UoP by screening both green and social projects to ensure each borrower meets defined thresholds, including having at least 70% of clients or beneficiaries be underserved women.

• UoP categories (seven) received a ‘Good’ alignment rating per our methodology:

• Green (three): water, sanitation and hygiene (WASH) loans; clean energy solutions; sustainable agriculture.

• Social (four): SME lending and microfinance; micro-savings and micro­insurance products; affordable housing; agriculture.
• Beneficiary focus: Underserved women in lower- and upper-middle-income countries, especially low-income and rural populations and those excluded from traditional financial systems.
• Geography: Primarily south Asia, southeast Asia and sub-Saharan Africa.

How Orange Bonds Compare to Broader Green Bond Market

Green bonds are the most mature segment of sustainable debt markets, with cumulative issuance surpassing USD4 trillion in recent years, according to Environmental Finance data. The label benefits from more established and well-developed frameworks (i.e. ICMA Green Bond Principles, Climate Bonds Initiative Certification, EU Green Bond Standard), widespread external reviews providers and offerings, and more calibrated impact reporting on environmental metrics such as greenhouse gas emissions avoided and renewable capacity installed.

By contrast, orange bonds are early-stage and much smaller, and issuance remains a tiny fraction of sustainable debt. Their principles are newer, external verification structures are emerging, and impact measurement centres on gender outcomes (e.g. women borrowers reached, procurement from women-owned businesses, supply of goods and services to women).

Investor demand for green bonds is also broad and mainstream. Interested stakeholders tend to be financial institutions, asset managers, insurers and pension funds often with climate­related or net-zero mandates, supplemented by dedicated green bond funds. On the other hand, orange bonds attract a more niche base consisting of impact funds, development finance institutions, and investors with specific social or gender-related mandates.

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