Corporate Social Bonds: A Legal Analysis

23 Pages Posted: 27 Mar 2020

See all articles by Diletta Lenzi

Diletta Lenzi

Universitu of Florence - Law School

Multiple version iconThere are 2 versions of this paper

Date Written: March 2, 2020


The article focuses on corporate social bonds, which are commonly defined as debt securities where proceeds are used to finance projects or ventures at favourable conditions, in order to achieve positive social outcomes or to address specific social issues.

Social bonds belong to the family of sustainable finance currently developing on international financial markets, especially in the EU, and where interest has also recently emerged at the political level. Although in March 2018 the European Commission published its Action Plan on Financing Sustainable Growth, at the moment of writing there is no specific EU legal framework for social bonds. The absence of a precise definition of social bonds and the uncertainty around the remedies for non-compliance of promised ‘social’ obligations entail serious risks of ‘socialwashing’ (i.e., the misappropriation of an increasingly attractive label). Through an analysis of the contractual design of social bonds, and the identification of different types of social bonds, the article identifies potential legal ‘Achilles heels’ of social bonds and suggests possible contractual remedies to ensure that both issuers and beneficiaries comply with their duties in terms of social impact achievement.

Finally, the article suggests a European Union intervention in developing a ‘goal-oriented’ definition for social bonds.

Keywords: social bonds; corporate bonds; sustainable finance; socially responsible investment; SRI

JEL Classification: K22, G5

Suggested Citation

Lenzi, Diletta, Corporate Social Bonds: A Legal Analysis (March 2, 2020). Available at SSRN: or

Diletta Lenzi (Contact Author)

Universitu of Florence - Law School ( email )

Firenze, 50129

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Abstract Views
PlumX Metrics