Instituto de Crédito Oficial (ICO) expands its Social Bond Framework, and bolsters its commitment of contributing to those sectors identified as a priority due to their social, cultural, innovative or environmental significance. This updated framework has received the favourable Second Opinion of Sustainalytics, as the previous one did.
ICO's first Social Bond Framework was published at the beginning of 2015, putting the focuson employment generation and preservation. Thus far, more than 53,600 projects have been financed.
The updated Framework allows ICO to go one step further and target other categories that cover social issues that need to be addressed, such as depopulation in empty Spain, companies facing difficulties due to natural or health disasters, socioeconomic advancement and empowerment, social housing, healthcare, education, professional training or affordable basic infrastructure.
It is worth highlighting the role of ICO in a scenario like the one we are going through currently, making credit flow to the business fabric. The Covid-19 crisis is hitting the world hard, with Spain being one of the most affected countries. ICO is playing an important role in facilitating the maintenance of employment and mitigating the economic and social impacts of the pandemic in Spain. The global Covid-19 outbreak not only threatens the well-being of the population but also people are suffering from the resulting economic downturn and consequences to employment.
In this context, ICO's efforts, capacity and responsibility are also reflected in this updated Framework. The categories included in the framework will not only help ICO mobilize funds towards healthcare activities, but also focus on the most vulnerable groups resulting from the Covid-19 outbreak, with a particular emphasis on SMEs.
With the update of the Social Bond Framework, ICO also recognises and reflects the importance to overcome the demographic challenge, which implies that any citizen can freely develop her/his personal, familiar and professional life projects with equal rights and opportunities. ICO addresses the issue by giving support to SMEs located in regions which have been facing depopulation over the last 10 years.
According to data from the Ministry for Ecological Transition and Demographic Challenge, even if the Spanish population has experienced an increase in the last years, this increase conceals different regional dynamics. Three out of four municipalities in Spain saw their population decrease in the last decade. This is a phenomenon that not only affects small municipalities, but also capitals from landlocked regions: 29 province capitals lost population during that period. Depopulation goes hand in hand with problems of low population density, notably hampering the delivery of basic services. And all this, together with the ageing of the population, leaves a substantial number of regions in Spain with negative vegetative growth. ICO therefore intends to mitigate such depopulation trend through SME lending and its effect on job creation/preservation.