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World Bank Bonds for Sustainable Development 2019 Impact Report Summary

Core Content

The World Bank's 2019 Impact Report on Sustainable Development Bonds outlines how bond proceeds support sustainable development and the Sustainable Development Goals (SDGs). It provides an overview of the World Bank's approach to engaging investors on the SDGs, details the bond issuance and lending activities in FY19, and highlights the environmental and social impacts of these bonds across various sectors.

Main Points

• Purpose of the Report: To explain how World Bank bond proceeds contribute to sustainable development and the SDGs, and to improve transparency and alignment with market frameworks.
• Investor Engagement: The World Bank issues two types of labeled bonds: Green Bonds and Sustainable Development Bonds. These are used to engage investors on the SDGs, explain the use of bond proceeds, and communicate how these activities contribute to the SDGs.
• Portfolio Approach: The World Bank takes a portfolio approach to issuing sustainable bonds, supporting a wide range of sustainable development sectors and the SDGs without earmarking funds for specific projects.
• Reporting Process: The report was informed by feedback from investors, underwriters, and technical experts, and includes both actual and projected impacts of projects, organized by sector and region.

Key Information

World Bank's Mission and Strategy

• The World Bank Group (WBG) has two twin goals: end extreme poverty by 2030 and promote shared prosperity.
• The WBG has identified three main priorities: accelerate sustainable and inclusive growth, invest in human capital, and strengthen resilience.
• The strategic framework is built on four pillars: serving all clients in low- and middle-income countries, creating markets and mobilizing finance for development, leading on global issues, and improving business practices to be more agile and efficient.

Sustainable Development Bonds

• The report covers the first impact report for all World Bank (IBRD) bond issuance and the entire portfolio of development activities.
• It highlights 2019 impact highlights, including actual results from completed projects and projected results from active projects.
• Featured projects include those in health, nutrition, water, gender equality, food loss and waste, and climate resilience.

Environmental and Social Impact

• The World Bank has a strong focus on environmental and social sustainability. All projects are assessed for their impact on the SDGs and environmental and social risks are mitigated.
• The report emphasizes the use of ESG factors in fixed-income investment and how the World Bank's bonds allow investors to support sustainable development while earning financial returns.
• The World Bank reports on GHG emissions reductions from its lending operations, with 71.5 million tCO₂ eq/year projected in FY19.

World Bank's Response to COVID-19

• The World Bank Group (WBG) is deploying up to US$160 billion over 15 months to support member countries in responding to the health and economic impacts of the pandemic.
• IBRD's role: Provides US$2.7 billion of this funding to strengthen public health preparedness and respond to health emergencies.
• The WBG has supported nearly 100 countries with COVID-19 programs, including health system strengthening, procurement of medical goods, and training of health workers.

Key Sectors and Projects

Health and Nutrition

• Goal: Improve health outcomes for women and children.
• Projects: 29 projects with US$6.5 billion in commitments.
• Partnerships: Collaborates with the Global Financing Facility (GFF) to support country-led efforts in health and nutrition.

Gender Equality

• Focus: Promoting equal participation of women and men in all aspects of development.
• Areas: Reducing gaps in health, education, and social protection; enabling better jobs; empowering women's ownership of assets; and enhancing women's voice and agency.

Water

• Investment: The World Bank is the largest multilateral financier of water-related projects in developing countries, with US$37.4 billion in investments.
• Strategic Plan: Published a Strategic Action Plan for Water in 2019, focusing on sustainable water resources, service delivery, and building resilience.
• Portfolio: 69 projects with US$14.9 billion in commitments.

Oceans, Fisheries & Coastal Economies

• Program: Blue Economy initiative supports sustainable development of marine and coastal resources.
• Activities: Includes fisheries management, marine pollution reduction, and climate change adaptation.
• Investment: US$5.6 billion in active IBRD and IDA projects.

Sustainable Cities

• Objective: Build resilient and sustainable cities to manage fragility risks and climate change.
• Investment: Annual investment in urban development and resilience projects is US$6 billion (FY17–19), with disaster risk management increasing from US$1.9 billion in FY12 to US$2.3 billion in FY19.
• Program: The City Resilience Program supports 57 cities in 39 countries with US$2.3 billion in funding.

Food Loss & Waste

• Environmental Impact: Food loss and waste account for 8% of global GHG emissions.
• Projects: Aim to improve post-harvest technologies, develop cold chain infrastructure, and support cooperatives and market access.
• Portfolio: 25 projects with US$4.6 billion in commitments.

Climate Resilience

• Action Plan: The WBG Climate Change Action Plan (2016–2020) includes ambitious targets such as increasing climate-related lending to 28% of total lending.
• Achievements: In FY19, IBRD projects had projected net GHG emissions reductions of 71.5 million tCO₂ eq/year.

Contact Information

• Capital Markets Department: The World Bank Treasury
• Address: 1818 H St NW, Washington, DC 20433, USA
• Email: debtsecurities@worldbank.org
• Phone: +1(202)477-2880
• Website: treasury.worldbank.org/capitalmarkets

Notes

• The report includes project-by-project reporting, with expected results and project identification numbers for easy access to more detailed information.
• The World Bank Green Bond Impact Report, first published in 2015, served as a model for this report.
• The disclaimer states that bond proceeds are not earmarked for specific projects or programs, and returns are not linked to the performance of any individual project or program.
• The report is intended for investors and capital market stakeholders to understand the sustainable development impact of their investments.

Timeline of Key Bond Issuances (FY18 & FY19)

• July 2018: World Bank issues CAD 1 billion benchmark bond, highlighting the benefits of investing in women and young people.
• August 2018: Issues SEK 1 billion 7-year bond to raise awareness about the role of water and ocean resources in development.
• September 2018: Issues USD-denominated sustainable development notes with 7.5% VCER, working with UBS.
• October 2018: Joins forces with Skandia, SEB Life & Investment Management, Handelsbanken Fonder, and Church of Sweden to raise awareness for SDG 11.
• November 2018: Marks the 10-year anniversary of the green bond market with a USD 1.3 billion issuance, bringing the green bond program to USD 13 billion.

Conclusion

The report underscores the World Bank's commitment to sustainable development, ESG integration, and investor engagement. It highlights the financial and development impact of the World Bank's bonds and the strategic alignment with the SDGs and the WBG's twin goals. The reporting framework and accountability mechanisms are designed to enhance transparency, quality, and depth of information for investors and stakeholders.