Social impact bonds. financial yields and sustainable development impact

Abstract

Social Impact Bond (SIB) is one of the newest financial instrument available, belonging to the Sustainable Development Bonds group, underrepresented in market although with a large development potential. After the recent crisis, social demand concern has been increased and, consequently, social investments development has been grown. This report is going to analyse SIBs, their financial yields and Sustainable Development impact. The first part will be a theoretical analysis of SIBs’ characteristics, evolution and research. The second part will consist of an empirical analysis to calculate SIBs’ financial yields and their Sustainable Development impact. SIBs’ financial yields are higher than Fixed Income Bonds’ yields. In order to analyse SIBs’ impact, selecting Sustainable Development Goals (SDGs) as the proxy for Sustainable Development, it has been observed a Social Impact Bond support in the 35.29% of the Sustainable Development necessities. This methodology has provided another SIB’s classification focused on their impact in SDGs.