In another major development for the sustainable finance market, the European Commission announced today that it will issue up to €100 billion of social bonds. In preparation for the forthcoming issuance of EU SURE bonds, the commission also announced the adoption of a new Social Bond Framework, outlining the eligible uses of funds raised.

President of the European Commission, Ursula von der Leyen, said:

“We are not only investing billions of euros to save jobs in Europe and reduce the social impact of the coronavirus pandemic, but we are also doing it by issuing social bonds. This will give investors the chance to contribute to our efforts and up to €100 billion will help keep people in jobs in our Member States.”

The bond issue will take place under the recently approved temporary Support to mitigate Unemployment Risks in an Emergency (SURE) program. Funds from SURE will be made available for Member States that need to mobilise significant financial means to fight the negative economic and social consequences of the coronavirus outbreak on their territory. To date, the Commission has proposed a total of €87.8 billion in financial support under SURE to 17 Member States.

Commissioner Johannes Hahn, in charge of Budget and Administration, said:

“The decision to issue the EU SURE bonds as social bonds will be a game changer for the global social bonds market. At the same time, it is a clear demonstration of the EU’s long-term commitment to sustainable financing. I am very excited about today’s announcement and looking forward to the forthcoming EU SURE issuance in the very near future.”

The Social Bond Framework outlines eligible uses of funds from the issue, specifying that the proceeds will help to finance measures by EU Member States to alleviate negative impacts on employment income as a result of the Covid-19 pandemic. The framework also highlights that the social expenditures made under the program aim to contribute to UN Sustainable Development Goals (SDGs) number 3 (Good Health and Well Being), and 8 (Decent Work and Economic Growth). The European Commission stated that the framework has been independently evaluated by external evaluator Sustainalytics.