MuniFin has offered social finance for its customers’ projects that produce widespread social benefits and serve the needs of their users in an exemplary way since 2020. MuniFin’s social finance projects promote equality, communality, safety, welfare, or regional vitality.
Since its founding, MuniFin has had a major role in financing municipalities and social housing sector, both of which are integral components of the Finnish welfare society. Due to this very nature, MuniFin has always been financing projects that have a great social impact. With social finance, the aim is to find projects that have the greatest positive social impact and promote well-being in the Finnish society.
Similarly to green finance, social finance projects are selected using MuniFin’s Social Bonds Framework and finally approved by the Social Evaluation Team. This three-person team consists of social experts that includes two independent experts and one member from MuniFin’s customer solutions division. Every project is analysed independently.
All social finance projects are financed and located in Finland. To make socially sound investments more attractive to our customers, we grant approved social finance projects a margin discount of 2 basis points.
The project categories of MuniFin’s Social Bonds Framework
- Social housing projects
- Welfare projects
- Education projects
The majority of the eligible projects are long-term projects with maturities varying from 5 to 41 years.
The Second Opinion for MuniFin’s Social Bonds Framework has been provided by ISS ESG.
Social finance is funded by social bonds
MuniFin issued its inaugural social bond in September 2020 and tapped the bond in October 2020. The outstanding amount of the social bond maturing in 2035 is EUR 600 million.
MuniFin aims to issue one benchmark sized social bond per year in EUR or USD.
To provide investors with more detailed information about social finance projects and their impacts, MuniFin publishes a Sustainable Bonds Impact Report annually, which includes a section for social finance as well as green finance.