Yoon Suk Yeol: Was South Korea’s president thwarted by a spring onion?
Rebuilding Korea PartyIn February, the price of a single apple in Korea hit$ 7 ( £5.5 ), albeit at a fancy department store. Although fruit is infamously costly below, the amount has already crossed a line for voters who have been grappling with punishing price increases.
President Yoon Suk Yeol visited a food industry in an error effort to address their reservations and gushed about the “reasonably priced” spring garlic ‘ lack of quality. The industry in question was in reality heavily subsidised. Online indignation and scorn unfolded.
The opposition party president yelled,” The leader is going to be brought down by a spring onion.”
However, one of the many reasons why President Yoon’s liberal party lost South Korea’s legislative votes, which were viewed as a vote of confidence on his first two years in office, is the price of meals.
Mr Yoon has always been unhappy. Since receiving the smallest share of the vote in South Korean history, which was 0.7 %, his approval rating has typically been between 30 and 40 %. Next month, half of those surveyed judged him to have done a “very awful” work so far.
” There are many situations that have chipped away at his standing,” said Dr. Lee Sangsin, a political scientist and polling professional. Second, there are a number of political errors that have caused global media coverage, such as when Mr. Yoon was caught swearing on microphone shortly after meeting US President Joe Biden. Koreans who thought Mr. Yoon had damaged their popularity abroad were embarrassed by these situations.
Then there is his family, Second Lady Kim Keon Hee, who, according to Professor Lee, “people like even more than the chairman”.
Additionally, Mr. Yoon’s aggressive social approach has alienated voters. Mr. Yoon, a former prosecutor without any previous political experience, is maybe accused of acting more like a counsel than a politician.
” He gives the impression that he is stubborn, does n’t listen or compromise, and has developed an almost authoritarian manner”, said Dr Lee from the Korea Institute for National Unification.
In summary, President Yoon has failed to appeal to citizens outside of his devoted liberal center. The result is that his party has failed to take control of the legislature, which means it will be challenging for him to pass legislation and address pressing issues like a slowing economy, impossible house prices, and a rapidly aging population.
Before Wednesday, the opposition now controlled the legislature. He now has the only majority-holding presidency in South Korea’s background to be absent for the entire five-year expression. His standing has been seriously weakened, and he runs the risk of becoming what some experts refer to as a “lame duck.”
Friendliness and growing divisions
Mr. Yoon has so far concentrated his efforts on foreign policy despite his unpopularity at home, and despite this, he has managed to make friends internationally. He stepped into power with the intention of wanting South Korea to take a bigger part in the world and was determined to change from what he thought his predecessor’s astigmatism, who by the end of his term had become preoccupied with reconciling with North Korea.
Mr. Yoon defended his position as a proponent of progressive, democratic norms and promised to punish those who disregarded them. Hence, his plan has been to be aggressive with Pyongyang. He has increased military exercises on the island, imposed restrictions on the North, and retaliated whenever Kim Jong Un tries to bait him.
His detractors say he has been excessively controversial. Relations between the two Koreas are at their worst in decades, and the North is launching more arms than ever before.
But his connection with the US has blossomed. Mr. Yoon’s international policy has been focused on strengthening Seoul’s security ties with Washington. It was symbolic of how both places were singing from the same page when he serenaded President Biden with Don McLean’s American Pie. Mr. Yoon has been a source of joy for America as it works to improve its alliances in Asia to counteract China.
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Mr. Yoon gained even more value from the US when he ended longstanding controversies with Japan and established a three-way security partnership between Tokyo, Seoul, and Washington at a major political price. Although the action was not well-liked at home, northern diplomats praised the president for his courage and bravery. As a main weak link in Asia, Japan and South Korea’s lack of security relations had been acknowledged.
However, for bravery has cost. South Korea has historically treaded a fine line between the US and China, properly balancing the demands of its largest trading partner and military allies. ” Strategic misunderstanding” was the title given to this method. But imprecise is not Mr Yoon’s design. He has been critical of China, also warning it over its attitude towards Taiwan, to the fury of Beijing. South Korean officials have never done this earlier. Mr. Yoon’s comments appeared to be aggressive and out of action with some members of his team.
Some in the authorities believe that they have allowed things to go wrong with China, and following the election they need to remedy the harmony, mainly to revive economic ties, according to Dongmin Lee, a professor of political science at Dankook University.
Some people around contend that while promoting liberal democratic principles is noble, it might not be the best course of action for a nation sandwiched between China and Russia, especially as they become more and more close to your adversary. ” North Korea is a component in every decision we make,” according to a source.
The potential White House reshuffle poses the biggest and most unexpected obstacle for Mr. Yoon in the upcoming season. While in office, Mr. Trump courted Kim Jong Un and threatened to oust all of the US’s forces from South Korea. Whichever way Mr Yoon takes, Trump’s re- vote does push him to change course.
However, Mr. Yoon’s state has been accused of political understrength at apartment, despite aligning himself with the west as a proponent of politics.
He has branded his competitors” communists”, attacked the advertising for “fake information” and his company has pursued slander cases against important editors. He has been accused of stoking female groups, vowing to dismantle the president’s gender equality government. He has otherwise vacated the position of gender minister because he was unable to do so without the consent of the political system.
Although it’s common in South Korea, Mr. Yoon has never sought settlement with the opposition’s head. Otherwise, he has resorted to his political filibuster to bomb rules. Since the 1980s, he has used his reject more than any other leader. He has the reputation of someone who does n’t care about getting popular but who will do what he believes, regardless of what others think or say.
Jeongmin Kim said,” It seems as though what Yoon truly cares about is being remembered fondly by his extreme supporters and in the record books as opposed to what the rest of the people, the parliament, or even his own party thinks of him.”
Through his peace with Japan, Yoon Suk Yeol has probably now established himself as a landmark in history. But with his expert dented, he will have less influence worldwide going ahead. At house, his lack of support means South Koreans may expect more political chaos, political enmity and polarisation.
Related Issues
Senate accepts same-sex marriage bill in first reading
PUBLISHED : 2 Apr 2024 at 15:55
The same-sex marriage bill cruised through the first reading in the Senate on Tuesday, was referred to a vetting committee and is expected back on the floor in July.
The House of Representatives passed the bill, which supports gender equality, on March 27.
The Senate on Tuesday voted 147-1, with seven abstentions, to accept the bill. The debate was then adjourned for committee stages.
The Senate is going into recess and the vetted legislation is expected to be returned for passage at the next session in July.
Senators agreed in principle to the bill, but some were concerned about issues such as necessary amendments to related laws once it becomes law.
Senator Piyachat Wanchaleom, a member of the committee on law, justice and police affairs, said more time may be needed for the law amendment period, which requires a thorough study by all affected state agencies.
Once it becomes law, Thailand will be the first country in Southeast Asia to allow same-sex marriage and only the third in Asia, after Taiwan and Nepal.
The bill could take effect within 120 days of royal endorsement.
House passes landmark marriage equality bill
Thailand would only be the second country in Asia to recognize same-sex organisations.
PUBLISHED: 27 Mar 2024 at 14: 41
In its final checking on Wednesday, the House of Representatives approved a union equality bill, a historic step that will allow the nation to become the next nation in Asia to legalize same-sex unions.
Before it becomes laws, which is anticipated later this year, the costs needs approval from the Senate and aristocratic support. All major events ‘ interests were represented in the bill, and 400 of the 415 politicians present, out of which 10 voted against it, supported it.
Danuphorn Punnakanta, a Pheu Thai listing- MP and president of the political commission on the document costs, said,” We did this for all Thai people to lower gap in society and start creating equality.
” I want to ask you all to produce history”, he told other lawmakers.
The moving of the bill marks a major step towards cementing Thailand’s position as one of Asia’s most progressive societies on lesbian, gay, bisexual and transgender issues, with openness and complimentary- riding attitudes coexisting with standard, traditional Buddhist values.
Thailand has long been a draw for similar- sex couples, with a lively LGBT cultural scene for locals and expatriates, and precise campaigns to get LGBT travellers.
The costs may take effect within 120 times of royal assent. Thailand would join Taiwan and Nepal as the first nations in Asia to legalize same-sex organisations.
More than a decade has passed since the bill’s creation, with difficulties brought on by political upheaval and disagreements regarding the best ways to approach it and what should be.
The Constitutional Court ruled in 2020 that the current wedding law, which merely recognises heterosexual couples, was legal, recommending policy be expanded to guarantee rights of another genders.
In the first reading, the Parliament voted in favor of four different draft bills on same-sex marriage and assigned a committee to work through them all into one draft.
The bills propose redefining the definitions of 68 Civil and Commercial Code provisions to ensure gender equality and diversity.
Breakaway parties roil South Korea’s two-party system – Asia Times
Modern South Korean politics has usually been dominated by only two main parties – in common with many other states with strong political techniques. But that could quickly shift.
New voter anger is creating options for smaller social events in the forthcoming parliamentary election on April 10, 2024.
Heading into that voting, the two main parties – President Yoon Suk Yeol’s People Power Party and the opposition Democratic Party – between them hold 270 votes in the 300- part congress. But both factions are grappling with inner struggles and social controversies that are fueling the idea of new, rebel parties making gains.
The outcome could be a dual- party legislature. As a social scientist with a emphasis on East Asia and foreign politics, I believe that goal has the potential to transform the country’s domestic and international plan.
Parliamentary chaos
Polling suggests that South Koreans have n’t been happy with the performance of their politicians for years, with one 2022 survey putting trust in the national assembly at just 24 %. Activities since then are unlikely to have improved trust in either principal group.
Since Yoon was elected leader in 2022, his parliamentary plan has been met with resistance by the antagonism- controlled National Assembly. His ideas for reforming the government’s education, income and work techniques have stalled as a result.
However, Yoon has vetoed many bills passed by the National Assembly, such as the “yellow box” law, which limits companies ‘ lawsuits for injury claims over work union disputes, and legislation calling for specific probes into the crowd crush inside Seoul’s Itaewon district during Halloween weekend in 2022 that resulted in hundreds of deaths and injuries.
On foreign policy, the opposition Democratic Party has faulted the Yoon government’s pursuit of increased security ties with Japan in the face of continued bilateral tensions over Japan’s past colonial history in Korea.
Specifically, the opposition criticized a bilateral deal on compensation for the victims of forced wartime labor in Korea, and the Yoon government’s acceptance of Japan’s release of wastewater from the Fukushima nuclear plant into the Pacific Ocean.
Last fall, partly as a protest against the president’s foreign policy and in a bid to overhaul the government’s cabinet, the National Assembly passed a nonbinding no- confidence motion against Prime Minister Han Duck- soo, although Yoon refused to dismiss his premier.
The net result of the political gridlock is that both the Yoon government and the Democratic Party face high levels of public disapproval. Yoon’s approval rating has stagnated below 40 %, and the majority of voters have expressed an intention to hold his government accountable in the upcoming election by supporting opposition parties.
However, the Democratic Party has failed to capitalize on Yoon’s unpopularity, due to similar public disapproval toward the party’s leader, Lee Jae- myung.
Intraparty factions
South Korea’s two main parties have frequently experienced internal feuds among factions supportive and opposed to party leadership. In recent months, factions opposed to both Yoon’s and Lee’s leadership have bolted from their respective parties.
In January 2024, Lee Jun- seok, former People Power Party chairman, started the New Reform Party with party members who protested the pro- Yoon faction’s seemingly cliquish party leadership.
This “non- Yoon” faction has also criticized the president’s veto of the special counsel bill to investigate allegations surrounding First Lady Kim Keon- hee, which include claims of violating anti- graft laws and involvement in stock price manipulation.
The Democratic Party is facing a similar challenge. Also in January 2024, Lee Nak- yon, former prime minister under the previous Democratic government of President Moon Jae- in, started the New Future Party, criticizing his former party as having turned into a “bulletproof shield” for the unpopular leader Lee Jae- myung. Specifically, the “non Jae- myung” faction has criticized him for refusing to step down despite being under criminal investigation on corruption charges.
These new breakaway parties ‘ strategy is to take advantage of South Korea’s mixed- member proportional election system, which provides opportunities for smaller parties to win seats. To do so, they have been focusing efforts on building concentrated support among core groups of voters.
The New Reform Party has gained support among younger conservative male voters critical of the older generation of conservative politicians close to Yoon.
Meanwhile, the New Future Party retains some support among traditional Democratic Party members, who feel disappointed with the direction of the party. Several Democratic legislators who claimed to have been purged by the party leadership have joined Lee Nak- yon, widening the schism within the main opposition party.
Potential impact
The latest polls indicate a tight race between the People Power Party and the Democratic Party, with a 37.7 % and 36.9 % share of the vote, respectively. If the breakaway parties win even a small number of seats, the result could be a “hung parliament”, in which neither main party can form a single- party majority.
That would leave smaller parties with huge legislative leverage.
The New Reform Party is more likely to partner with the Yoon government on policy agendas – despite personal antipathy between Yoon and Lee Jun- Seok. On foreign policy, New Reform Party members have expressed support for pragmatic relations with Japan and have warned against excessive anti- Japan nationalist rhetoric in domestic politics.
On social and economic policies, the New Reform Party’s platform likewise aligns with the Yoon government in supporting the expansion of South Korea’s semiconductor industry and abolishing the Ministry of Gender Equality.
Particularly on gender issues, the New Reform Party could push the Yoon government farther toward positions that appeal to younger male conservative voters, such as by introducing female military service. At present, only men are subject to South Korea’s mandatory military conscription, a policy that many younger South Korean men perceive as discrimination.
Lee Nak- yon’s New Future Party is more critical of the Yoon government’s domestic and foreign policies. However, with its platform to end two- party gridlock, the New Future Party could also seek a role as an arbitrator over contentious policy issues.
The new parties could also support the opposition Democratic Party in pressuring the Yoon government to be more accountable. Specifically, Yoon could face increased demands to approve investigations on the allegations surrounding the First Lady and to solicit opposition parties ‘ consent for future cabinet nominations.
It is still uncertain how well the breakaway parties will perform in the upcoming election. And they face competition from another new party, the National Innovation Party, that is politically aligned with the Democratic Party.
One recent election in East Asia will give these new parties encouragement: Taiwan’s legislative election in January saw a new third party become kingmaker in the legislative assembly.
If one or more of the new South Korean parties should emerge from the election as with parliamentary kingmaking clout, it would represent a crack in the country’s two- party system and could free up the gridlock that has dogged parliamentary politics in recent years.
Jong Eun Lee is an assistant professor at North Greenville University.
This article is republished from The Conversation under a Creative Commons license. Read the original article.
‘More efforts needed’ to achieve sustainable development goals
Progress is currently” never quick much.”
PUBLISHED: 15 Mar 2024 at 05: 00
The UN Global Compact’s Outreach & Engagement captain, Sue Allchurch, warned that the effort to create a healthier world area is in danger of failing. More ambitious shared actions from all stakeholders is required to meet the UN’s sustainable development goals in 2030.
Ms. Allchurch said in a statement to the media during a trip to Thailand that while the world has acknowledged the value of sustainable development, progress toward achieving the goals is no quick enough.
There are many barriers towards achieving the goals, including political instability, financial problems, and the effects of the pandemic and climate change, she said.
She said,” The business market is presently facing an unprecedented number of unusual global challenges that have never occurred before,” noting that the issues are much more difficult than they have previously.
According to Ms. Allchurch, citing a survey conducted by the UN Global Compact, 98 % of corporate executives global concurred that the UN’s sustainable development goals have given them a renewed target.
Around 75 % of Directors in the Asia-Pacific territory claimed to have contributed to the achievement of the targets by implementing conservation techniques in their day-to-day operations. The work, however, are n’t enough, she said. According to the study, 85 % of businesses worldwide are not on record to meet the objectives.
Only 39 % of the companies that have set goals that are in line with what the world needs, according to Ms Allchurch, out of the 91 % of those who have committed to sustainable development goals.
She claimed that the private business needs to set more ambitious goals in order to overcome the obstacles to achieving sustainable development goals and raise public awareness.
” We are convinced that the secret business will start to make significant changes.” They have come to an agreement that the technologies is a means of limiting the consequences, and they will invest in it, she continued.
The United Nations Global Compact last month released a CEO Sustainable Development Report that gathered major executive views on conservation, based on the 2030 SDGs plan, participated by 2, 600 Executives from 128 places.
According to the report, 98 % of CEOs listed inflation and price fluctuations as their top concerns, with 98 % of them citing them as their top concerns.
Climate change ranked third among the fears, with 93 % of the Directors listing it as a problem.
The UN Global Compact is now focusing on five key areas of green growth, particularly gender equality, climate action, living income, water endurance as well as finance and investment.
‘More efforts needed’ to achieve SDGs
Progress is currently” never quick enough.”
PUBLISHED: 15 Mar 2024 at 05: 00
The UN Global Compact’s Outreach & Engagement captain, Sue Allchurch, warned that the effort to create a healthier world society is in danger of failing. More optimistic collective action from all partners is required to accomplish the UN’s 2030 objectives.
Ms. Allchurch said in a statement to the media during a trip to Thailand that while the world has acknowledged the value of sustainable development, progress toward achieving the goals is no quick enough.
There are many barriers towards achieving the goals, including political instability, financial problems, and the effects of the pandemic and climate change, she said.
She said,” The business market is presently facing an unprecedented number of unusual global challenges that have never occurred before,” noting that the issues are much more complicated in nature than they have previously.
According to Ms. Allchurch, citing a survey conducted by the UN Global Compact, 98 % of corporate executives global concurred that the UN’s sustainable development goals have given them a renewed target.
By implementing conservation techniques in their main businesses, roughly 75 % of CEOs in the Asia-Pacific territory claimed to have contributed to achieving the goals. The work, however, are n’t much, she said. According to the study, 85 % of businesses worldwide are not on record to meet the objectives.
Only 39 % of the companies that have set goals that are in line with what the world needs, according to Ms Allchurch, out of the 91 % of those who have committed to sustainable development goals.
She claimed that the secret business needs to set more ambitious goals in order to address the obstacles to achieving sustainable development goals and raise public awareness.
” We are convinced that the secret business will start to make significant changes.” They have come to an agreement that the technology is a way to reduce the consequences, and they will spend in it, she continued.
The United Nations Global Compact last month released a CEO Sustainable Development Report that gathered major executive views on conservation, based on the 2030 SDGs plan, participated by 2, 600 Executives from 128 places.
According to the report, CEOs ‘ top concerns are inflation and price fluctuations, with 98 % of them citing it as their top concern.
Climate change ranked third among the fears, with 93 % of the Directors listing it as a problem.
The UN Global Compact is now focusing on five key areas of green growth, particularly gender equality, climate action, living pay, water endurance as well as finance and investment.
IWD Deal Analysis: How IIX’s WLB6 Orange bond helps women’s livelihoods in Asia | FinanceAsia
In a growing regional trend, December 2023 saw the sixth issuance of Impact Investment Exchange (IIX)’s Women’s Livelihood Bond (WLB) Series, the $100 million Women’s Livelihood Bond 6 (WLB6).
Altogether the IIX, since 2017, has raised $228 million to support women’s economic empowerment in Asia, with the overall trend in deal size on an upward trend. FinanceAsia discussed the investors, the rationale and the processes involved in order to celebrate International Women’s Day (IWD) 2024 on Friday, March 9 and the drive towards diversity, equity and inclusion (DEI) across the region.
The closing of WLB6 marked the world’s largest sustainable debt security and was issued in compliance with the Orange Bond Principles and aims to uplift over 880,000 women and girls in the Global South.
Global law firm Clifford Chance advised Australia and New Zealand Banking Group (ANZ) and Standard Chartered Bank pro bono as placement agents.
Proceeds from WLB6 will be used to promote the growth of women-focused businesses and sustainable livelihoods across six sectors: agriculture; water and sanitation; clean energy; affordable housing; SME lending and microfinance across India, Cambodia, Indonesia, Kenya and Vietnam. 100% of the $100 million proceeds designed to advance UN’s Sustainable Development Goals (SDG) 5: gender equality and 25-30% designed to advance SDG 13 — climate action.
Robert Kraybill, chief investment officer, IIX, told FA: “The Women’s Livelihood Bond (WLB) Series is a blended finance instrument that pools capital from public-sector development finance institutions and private-sector investors. The public sector investors provide risk-tolerant “first-loss” capital in the form of subordinated notes, while the private sector investors purchase the senior bonds.”
“The WLB Series targets a range of private sector investors seeking a combination of high impact with low risk and an appropriate return. From the outset, beginning with the WLB1, the bonds have attracted both family offices and institutional investors. Initially, this was skewed towards family offices. As the WLB issuances increased, we saw increased interest from institutional investors, such that over 90% of the WLB6 was placed with institutions,” added Kraybill.
For WLB6, there were global investors on the deal including from the US, Europe and Asia Pacific (Apac). The WLB6 bonds comply with the EU and UK securitisation regulations, making it easier for European institutional investors to participate. For example, one of the investors was Dutch pension fund APG Asset Management which invested $30 million.
Kraybill said: “Throughout building the loan portfolios for the WLBs – from sourcing and screening to due diligence – we integrate traditional credit criteria with impact criteria. We look to invest in companies meeting our credit and financial criteria while delivering meaningful positive impact.”
“We are proud that we have not experienced any payment defaults or credit losses on any of the WLB loan portfolios, demonstrating the resilience of the high-impact women-focused businesses that we work with, even in the face of challenges posed by the Covid-19 pandemic. The first two bonds in the WLB Series – WLB1 and WLB2 – have matured and been fully retired, meeting all of their obligations to bondholders,” Kraybill added.
The IIX, which is headquartered in Singapore and has offices in Australia, Bangladesh, Brunei, India, Indonesia, the Philippines, Sri Lanka and Vietnam, also tracks the impact outcomes generated by its investment throughout the life of the bonds and reports on the targets. WLB1 and WLB2 exceeded impact projections, according to IIX.
Complex deal
Given the number of parties involved and a myriad of regulations and compliance, the deal was not easy to put together.
Gareth Deiner, partner at Clifford Chance, explained to FA the law firm’s role in the deal: “We’ve been involved for several years on these transactions, and this is not the first woman’s livelihood bond that the IIX team has put together.”
Singapore-based Deiner continued: “Historically, we have acted on the trustee side, but we have been advising the lead managers of the transaction for the last three offerings. It’s approximately a three to four month execution process to make sure we get the documentation agreed and the structure in place. IIX do the underlying due diligence on the borrowers, which is necessary given that the financing is raised from the international capital markets. Together with their counsel, they work on the disclosure in the offering document for the bond transaction.”
“As counsel to the lead managers, we are responsible for the underlying contractual documentation for the notes and the offering, but it’s IIX who retain control over the loan documentation with the notes proceeds end-users, and putting the loan pool together. They’re doing due diligence on the on the underlying borrowers of the deal,” he explained.
This is backed up by IIX’s due diligence. IIX’s Kraybill explained: “The financial due diligence conducted by our credit team is similar to that of other emerging market lenders. What sets us apart is the upfront impact due diligence and ongoing impact monitoring and reporting conducted by our impact assessment team. Our team screens potential investments against rigorous eligibility criteria to ensure they contribute to positive outcomes for underserved women and gender minorities in the Global South while often empowering women as agents of climate action.”
Navigating US legal rules and dealing with investors from around the world also added to the complexity.
Deiner said: “Dealing with a wide range of investors, including qualified institutional buyers in the US, we needed to comply with US federal securities law, including limiting the sale of the notes to qualified purchasers under the US Investment Company Act. There were also certain structural considerations raised by the EU and UK securitisation regulation.”
“From a legal perspective, it was an interesting deal because there’s a wide range of highly technical substantive law, which required the input from specialists across the Clifford Chance network. We have the expertise across the globe and do a lot of sustainable financing work,” continued Deiner.
“Recently we’ve advised on some market-leading and groundbreaking transactions in terms of bringing sustainability finance technology to capital markets transactions,” he added.
However, this deal, in particular, involved social governance goals.
Deiner explained: “What we like about this particular transaction is that so much of the Environmental Social and Governance (ESG) agenda is about the environmental (E) angle, such as green bonds related to carbon transition and climate action. That encompasses sustainable development goal 13 of the UN Sustainable Development Goals (SDG).”
“However, you rarely hear about sustainable finance transactions that focus on the S and the G in ESG, which IIX champions. Each of the sustainable development goals (SDG) has its own hue, its own colour. This transaction focusses on SDG 5, which is gender equality, and are referred to as Orange bonds – orange being the hue for SGD 5. In addition, IIX has developed its own framework and principles to really drive that S in the ESG,” he added.
Tracking societal impact
There is still a key issue on how to track the impact of where the money ends up.
IIX’s due diligence process includes interviews with beneficiaries and stakeholders of investees, using its own digital impact assessment tool to incorporate input from a broad group of female beneficiaries. This verifies impact claims while giving a voice and value to the women it is assisting, according to Kraybill.
He continued: “Our selection process for projects funded through WLB6 closely aligns with the objectives of The Orange Movement. Each of the bonds in the WLB Series adheres to The Orange Bond Principles, which focuses on empowering women, girls, and gender minorities, particularly in climate action and adaptation.”
IIX looks at the potential of each project’s mission, vision, goals, and business structure, to evaluate alignment with the core values of the WLB Series and The Orange Movement. Its impact assessment team conducts due diligence to ensure selected projects meet criteria outlined by The Orange Movement and contribute to promoting gender equity and addressing climate challenges in emerging markets, according to Kraybill.
With the rise of bonds connected to ESG and DEI, the scrutiny from investors is also increasing, especially with the prevalence of greenwashing.
Clifford Chance’s Deiner said: “The legal landscape for green bonds and sustainability-linked bonds has evolved considerably in recent years, particularly regarding due diligence. When a company issues a green bond under a green bond framework, substantial work is required to ensure the bond’s integrity. This diligence has become a critical factor in investment decisions, as investors need to be confident that the environmental credentials are genuine and not merely an instance of greenwashing.”
“One of the key parts of the Orange bond initiative is achieving transparency in the investment process and decision, and the subsequent reporting, as the proceeds are going to an issuer who is on-lending it again, to, for example, a microfinance lender. It’s a combination of seeking an investment return and a view on the credit profile. The funds have specific objectives regarding capital allocation, and the appeal of the Orange bond aspect aligns with this focus,” Deiner added.
$10 billion goal
The IIX has an ambitious goal of mobilising $10 billion by 2030 and optimism abounds.
Kraybill said: “We remain optimistic about reaching our ambitious goal through sustained collaboration and concerted action, empowering women and girls worldwide while fostering inclusive and sustainable development.”
“Partnerships with the Orange Bond Steering Committee organisations, like the Australian government’s Department of Foreign Affairs and Trade (DFAT), the UN Capital Development Fund (UNCDF), Nuveen, and others, are vital in this endeavour. Together, we aim to build a gender-empowered financing system, mobilise new capital, and accelerate progress toward gender equality and women’s empowerment globally,” Kraybill added.
The Orange Movement is also building “Orange Alliances” at regional and national levels to bring together gender lens investors and other stakeholders. IIX is conducting training programs to train and certify Orange Bond verification agents.
“We’re introducing an “Orange Seal” for MSMEs and other organisations, which enhances their gender, DEI, and climate bona fides. We have expanded our transaction tagging functionality to include innovative finance instruments that adhere to the Orange Bond Principles framework. Furthermore, we’re eagerly anticipating the launch of the Orange Loan Facility, alongside numerous other initiatives to further the Orange Movement’s mission,” Kraybill said.
He said: “We remain optimistic about reaching our ambitious goal through sustained collaboration and concerted action, empowering women and girls worldwide while fostering inclusive and sustainable development.”
The next bond could potentially be much larger than WLB6’s $100 million.
Clifford Chance’s Deiner is also optimistic: “There’s a flow of transactions that we’re going to see over the next 12 months, and this an area that people are paying more attention to. The transactions have grown considerably over the years. These transactions have involved deals from around $20 million up to the latest offering of $100 million. So, there is clearly increasing demand for these transactions each year.”
Standard Chartered declined to provide a comment for the article.
¬ Haymarket Media Limited. All rights reserved.
IWD Deal Analysis: IIX’s WLB6 Orange Bond helping women’s livelihoods in Asia | FinanceAsia
In a growing regional trend, December 2023 saw the sixth issuance of Impact Investment Exchange (IIX)’s Women’s Livelihood Bond (WLB) Series, the $100 million Women’s Livelihood Bond 6 (WLB6).
Altogether the IIX, since 2017, has raised $228 million to support women’s economic empowerment in Asia, with the overall trend in deal size on an upward trend. FinanceAsia discussed the investors, the rationale and the processes involved in order to celebrate International Women’s Day (IWD) 2024 on Friday, March 9 and the drive towards diversity, equity and inclusion (DEI) across the region.
The closing of WLB6 marked the world’s largest sustainable debt security and was issued in compliance with the Orange Bond Principle and aims to uplift over 880,000 women and girls in the Global South.
Global law firm Clifford Chance advised Australia and New Zealand Banking Group (ANZ) and Standard Chartered Bank pro bono as placement agents.
Proceeds from WLB6 will be used to promote the growth of women-focused businesses and sustainable livelihoods across six sectors: agriculture; water and sanitation; clean energy; affordable housing; SME lending and microfinance across India, Cambodia, Indonesia, Kenya and Vietnam. 100% of the $100 million proceeds designed to advance UN’s Sustainable Development Goals (SDG) 5: gender equality and 25-30% designed to advance SDG 13 — climate action.
Robert Kraybill, chief investment officer, IIX, told FA: “The Women’s Livelihood Bond (WLB) Series is a blended finance instrument that pools capital from public-sector development finance institutions and private-sector investors. The public sector investors provide risk-tolerant “first-loss” capital in the form of subordinated notes, while the private sector investors purchase the senior bonds.”
“The WLB Series targets a range of private sector investors seeking a combination of high impact with low risk and an appropriate return. From the outset, beginning with the WLB1, the bonds have attracted both family offices and institutional investors. Initially, this was skewed towards family offices. As the WLB issuances increased, we saw increased interest from institutional investors, such that over 90% of the WLB6 was placed with institutions,” added Kraybill.
For WLB6, there were global investors on the deal including from the US, Europe and Asia Pacific (Apac). The WLB6 bonds comply with the EU and UK securitisation regulations, making it easier for European institutional investors to participate. For example, one of the investors was Dutch pension fund APG Asset Management which invested $30 million.
Kraybill said: “Throughout building the loan portfolios for the WLBs – from sourcing and screening to due diligence – we integrate traditional credit criteria with impact criteria. We look to invest in companies meeting our credit and financial criteria while delivering meaningful positive impact.”
“We are proud that we have not experienced any payment defaults or credit losses on any of the WLB loan portfolios, demonstrating the resilience of the high-impact women-focused businesses that we work with, even in the face of challenges posed by the Covid-19 pandemic. The first two bonds in the WLB Series – WLB1 and WLB2 – have matured and been fully retired, meeting all of their obligations to bondholders,” Kraybill added.
The IIX, which is headquartered in Singapore and has offices in Australia, Bangladesh, Brunei, India, Indonesia, the Philippines, Sri Lanka and Vietnam, also tracks the impact outcomes generated by its investment throughout the life of the bonds and reports on the targets. WLB1 and WLB2 exceeded impact projections, according to IIX.
Complex deal
Given the number of parties involved and a myriad of regulations and compliance, the deal was not easy to put together.
Gareth Deiner, partner at Clifford Chance, explained to FA the law firm’s role in the deal: “We’ve been involved for several years on these transactions, and this is not the first woman’s livelihood bond that the IIX team has put together.”
Singapore-based Deiner continued: “Historically, we have acted on the trustee side, but we have been advising the lead managers of the transaction for the last three offerings. It’s approximately a three to four month execution process to make sure we get the documentation agreed and the structure in place. IIX do the underlying due diligence on the borrowers, which is necessary given that the financing is raised from the international capital markets. Together with their counsel, they work on the disclosure in the offering document for the bond transaction.”
“As counsel to the lead managers, we are responsible for the underlying contractual documentation for the notes and the offering, but it’s IIX who retain control over the loan documentation with the notes proceeds end-users, and putting the loan pool together. They’re doing due diligence on the on the underlying borrowers of the deal,” he explained.
This is backed up by IIX’s due diligence. IIX’s Kraybill explained: “The financial due diligence conducted by our credit team is similar to that of other emerging market lenders. What sets us apart is the upfront impact due diligence and ongoing impact monitoring and reporting conducted by our impact assessment team. Our team screens potential investments against rigorous eligibility criteria to ensure they contribute to positive outcomes for underserved women and gender minorities in the Global South while often empowering women as agents of climate action.”
Navigating US legal rules and dealing with investors from around the world also added to the complexity.
Deiner said: “Dealing with a wide range of investors, including qualified institutional buyers in the US, we needed to comply with US federal securities law, including limiting the sale of the notes to qualified purchasers under the US Investment Company Act. There were also certain structural considerations raised by the EU and UK securitisation regulation.”
“From a legal perspective, it was an interesting deal because there’s a wide range of highly technical substantive law, which required the input from specialists across the Clifford Chance network. We have the expertise across the globe and do a lot of sustainable financing work,” continued Deiner.
“Recently we’ve advised on some market-leading and groundbreaking transactions in terms of bringing sustainability finance technology to capital markets transactions,” he added.
However, this deal, in particular involved social governance goals.
Deiner explained: “What we like about this particular transaction is that so much of the Environmental Social and Governance (ESG) agenda is about the environmental (E) angle, such as green bonds related to carbon transition and climate action. That encompasses sustainable development goal 13 of the UN Sustainable Development Goals (SDG).”
“However, you rarely hear about sustainable finance transactions that focus on the S and the G in ESG, which IIX champions. Each of the sustainable development goals (SDG) has its own hue, its own colour. This transaction focusses on SDG 5, which is gender equality, and are referred to as Orange bonds – orange being the hue for SGD 5. In addition, IIX has developed its own framework and principles to really drive that S in the ESG,” he added.
Tracking societal impact
There is still a key issue on how to track the impact of where the money ends up.
IIX’s due diligence process includes interviews with beneficiaries and stakeholders of investees, using its own digital impact assessment tool to incorporate input from a broad group of female beneficiaries. This verifies impact claims while giving a voice and value to the women it is assisting, according to Kraybill.
He continued: “Our selection process for projects funded through WLB6 closely aligns with the objectives of The Orange Movement. Each of the bonds in the WLB Series adheres to The Orange Bond Principles, which focuses on empowering women, girls, and gender minorities, particularly in climate action and adaptation.”
IIX looks at the potential of each project’s mission, vision, goals, and business structure, to evaluate alignment with the core values of the WLB Series and The Orange Movement. Its impact assessment team conducts due diligence to ensure selected projects meet criteria outlined by The Orange Movement and contribute to promoting gender equity and addressing climate challenges in emerging markets, according to Kraybill.
With the rise of bonds connected to ESG and DEI, the scrutiny from investors is also increasing, especially with the prevalence of greenwashing.
Clifford Chance’s Deiner said: “The legal landscape for green bonds and sustainability-linked bonds has evolved considerably in recent years, particularly regarding due diligence. When a company issues a green bond under a green bond framework, substantial work is required to ensure the bond’s integrity. This diligence has become a critical factor in investment decisions, as investors need to be confident that the environmental credentials are genuine and not merely an instance of greenwashing.”
“One of the key parts of the Orange bond initiative is achieving transparency in the investment process and decision, and the subsequent reporting, as the proceeds are going to an issuer who is on-lending it again, to, for example, a microfinance lender. It’s a combination of seeking an investment return and a view on the credit profile. The funds have specific objectives regarding capital allocation, and the appeal of the Orange bond aspect aligns with this focus,” Deiner added.
$10 billion goal
The IIX has an ambitious goal of mobilising $10 billion by 2030 and optimism abounds.
Kraybill said: “We remain optimistic about reaching our ambitious goal through sustained collaboration and concerted action, empowering women and girls worldwide while fostering inclusive and sustainable development.”
“Partnerships with the Orange Bond Steering Committee organisations, like the Australian government’s Department of Foreign Affairs and Trade (DFAT), the UN Capital Development Fund (UNCDF), Nuveen, and others, are vital in this endeavour. Together, we aim to build a gender-empowered financing system, mobilise new capital, and accelerate progress toward gender equality and women’s empowerment globally,” Kraybill added.
The Orange Movement is also building “Orange Alliances” at regional and national levels to bring together gender lens investors and other stakeholders. IIX is conducting training programs to train and certify Orange Bond verification agents.
“We’re introducing an “Orange Seal” for MSMEs and other organisations, which enhances their gender, DEI, and climate bona fides. We have expanded our transaction tagging functionality to include innovative finance instruments that adhere to the Orange Bond Principles framework. Furthermore, we’re eagerly anticipating the launch of the Orange Loan Facility, alongside numerous other initiatives to further the Orange Movement’s mission,” Kraybill said.
He said: “We remain optimistic about reaching our ambitious goal through sustained collaboration and concerted action, empowering women and girls worldwide while fostering inclusive and sustainable development.”
The next bond could potentially be much larger than WLB6’s $100 million.
Clifford Chance’s Deiner is also optimistic: “There’s a flow of transactions that we’re going to see over the next 12 months, and this an area that people are paying more attention to. The transactions have grown considerably over the years. These transactions have involved deals from around $20 million up to the latest offering of $100 million. So, there is clearly increasing demand for these transactions each year.”
Standard Chartered declined to provide a comment for the article.
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