An Analysis of Notes Linked to the Solactive Sustainable Development Goals world RC EUR Index issued by the World Bank

Abstract

The United Nations Sustainable Development Summit 2015 adopted “Transforming our world: the 2030 Agenda for Sustainable Development” at the United Nations Headquarters in New York from September 25-27, 2015. The agenda includes Sustainable Development Goals (SDGs), a set of 17 goals and 169 targets. In order to enhance these SDGs related activities, SDGs Bonds whose payoffs are linked to the stock index composing shares of corporations promoting SDGs were issued by the World Bank and arranged by BNP Paribas. In this paper, we evaluate these SDGs Bonds which can be considered as options on the stock indices associated with the firms promoting SDGs. We find out the value of the 15-year maturity SDGs bond with par value 100 is 91.02 and 20-year maturity SDGs bond with par value 100 is 86.90. The issuer earns the profit from investors. Furthermore, we consider these SDGs bonds are not necessary to induce the SDGs related activities as payoffs of these SDGs bonds are associated with SDGs index consisting of corporations promoting SDGs. We propose Japanese SDGs bonds whose payoffs are associated with the firm performance and the firm’s actual contribution to SDGs.