Orange Bond Initiative – A Pathway to Economic Empowerment for Women

LightCastle Analytics Wing
November 29, 2023
Orange Bond Initiative – A Pathway to Economic Empowerment for Women

The Opportunity

Vietnam has improved its position in global gender equality indices, ranking 71st and 83rd out of 170 countries in the Gender Inequality Index (GII) and Global Gender Gap Index respectively. However, in 2021, only 47.3% of total employees in Vietnam were female, with the majority working in the informal sector. 

The government of Vietnam has implemented measures to encourage the inclusion of women in the workforce, such as preferential support for women-owned SMEs and subsidies for training. Despite this, policies that protect and empower female workers are limited, and access to finance remains a key barrier for female entrepreneurs. According to Mckinsey Global Institute, improvements in gender equality could contribute an additional USD 40 Bn to Vietnam’s GDP by 2025. 

Gender Lens Investing (GLI) is a strategy or approach to investing that seeks to decrease gender bias and discrimination and increase access to finance and networks for female entrepreneurs. The IIX GLI framework positions women as agents of change and is used to increase understanding of gender lens investing and establish a common language for it in Vietnam.

Orange Bond Initiative - A Pathway To Economic Empowerment For Women

IIX’s Orange Bond Initiative aims to unlock USD 10 Bn by 2030 as the world’s first GLI asset class, recognizing the institutional problem of limited intersectionality in the impact investing industry. The Orange Bond strives to create systemic change in financial markets by placing gender equality at its core. It commits to adopting an inclusive approach when designing the guiding principles, standards, transactions, and certification tools.

The Approach

In collaboration with LightCastle, the Orange Bond Initiative implemented by IIX aims to provide ecosystem players with an in-depth understanding of the orange bond through customized training modules. The modules prepared for this project have been briefly discussed below:

  1. Course 1: Financing For Gender Equality – Emphasizes the positive impact of investing in women on families, communities, and economies. Additionally, it addresses the challenge of limited adoption of gender lens investing (GLI) and advocates for a shift from simplistic, siloed, and top-down approaches to more bottom-up, intersectional, and transparent efforts.
  2. Course 2: The Orange Bond Initiative – Focuses on the Orange Bond Initiative (OBI) as a solution to impediments in the GLI market, including the lack of a systematic approach, insufficient inclusion in decision-making processes, and the need for enhanced transparency.
  3. Course 3: Understanding and Applying Orange Bond Principles –  Provides a systematic approach to GLI through the Orange Bond Principles. It guides participants in understanding and applying the three principles for effective gender-focused impact investments.
  4. Course 4: Impact Confirmation for Orange Bonds – Provides an understanding of how gender-related impact can be monitored and measured in a transparent manner. 

Way Forward 

The Orange Bond’s focus on gender equality aligns with broader efforts to promote women’s economic empowerment. By financing projects that create economic opportunities for women, such as supporting women entrepreneurs or facilitating access to education and employment, the bond contributes to more inclusive economic growth.

Additionally, environmental projects with a gender-sensitive approach can contribute to sustainable communities, benefiting women who often play key roles in environmental management. By demonstrating the viability and positive impact of investments that prioritize gender equality, it may encourage other investors and financial institutions to adopt similar principles, amplifying the overall impact on women’s empowerment.

In essence, the Orange Bond serves as a financial instrument that not only allocates capital with a gender-positive focus but also integrates principles that promote diversity, inclusivity, and transparency. Through these mechanisms, it has the potential to contribute significantly to advancing women’s empowerment and fostering positive social change.

WRITTEN BY: LightCastle Analytics Wing

At LightCastle, we take a systemic and data-driven approach to create opportunities for growth and impact. We are an international management consulting firm which creates systemic and data-driven opportunities for growth and impact in emerging markets. By collaborating with development partners and leveraging the power of the private sector, we strive to boost economies, inspire businesses, and change lives at scale.

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