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Ministry of Finance and Economic Affairs

Updated Sovereign Sustainable Financing Framework and an Annex on Financing for Gender Equality

The Ministry of Finance and Economic Affairs has issued an updated Sovereign Sustainable Financing Framework, but the original framework was issued in September 2021. The update consists of minor adjustments to ensure that the framework is in accordance with the most recent international guidelines. In addition to the update, an annex to the framework on financing for gender equality has been issued. This enables the Government to issue sustainable, green, blue, social and/or gender bonds in Iceland and abroad.

The creation of the Annex on Financing for Gender Equality reflects the Government’s strong commitment to gender equality and women’s empowerment and ambition to be at the forefront when it comes to leveraging the tools of public finance and capital markets in that regard. The work on this Annex was led by the Ministry of Finance and Economic Affairs with participation of other ministries and governmental agencies, as well as consultation with UN Women’s technical expertise.

The market for sustainable bonds has grown immensely in the last decade and the diversity has increased. As with all sustainable financing instruments, there is a growing interest in investment opportunities that contribute to gender equality, but so far, no sovereign has issued designated gender bonds.

Bjarni Benediktsson, Minister of Finance and Economic Affairs:

“The update of the financing framework is an important step towards sustainable bonds issuance, but we see an increased demand for such bonds. A special gender annex is an exciting addition. We are, and intend to continue to be, at the forefront internationally when it comes to gender equality. Here we are mobilizing financial markets and public finance in this regard.”

Bonds issued under this sustainable financing framework and annex provide funding for certain defined Treasury expenditures, which fall into four categories:

  • Green projects (climate and environmental issues), such as energy transition of vehicles and infrastructure, infrastructure for bicycles and electric bicycles, green buildings, natural disaster preventions, adaptation to the circular economy, forestry, wetland reclamation etc.
  • Blue projects (climate and environmental issues relating to the ocean, seafood, and related sectors), such as electrification of harbours, energy transition for ships and ferries, a sewage treatment initiative, etc.
  • Social projects, such as social housing, patient care, support to people with limited work capacity and actions to reduce drop-out rates from schools, etc.
  • Gender projects, redistribution of women’s unpaid care with investment in the care economy, essential social and economic support to women in vulnerable positions, services and programs to prevent, respond to and prosecute sexual and gender-based violence, entrepreneurial support and grant programs for underrepresented groups, etc.

All project categories are considered to promote one or more sustainable development goals (SDGs) and together they cover all 17 SDGs, making this a comprehensive sustainable financing framework.

The framework and the annex have received a second party opinion from CICERO Shades of Green, which is now a part of S&P Global. CICERO rates the blue and green bond issuance under the framework as Dark Green. The score indicates that the projects to be financed support the long-term vision of a low-carbon future and climate resilient future. The social and gender bond issuance are not graded on a similar scale as the green and blue categories but get a positive review. In CICERO’s opinion the eligible social projects credibly aim to support the existing social infrastructure in Iceland, and the gender categories support interventions that address some of the most pressing shortcomings identified by studies.


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