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CONTRIBUTORS

David Zahn, CFA, FRM

Head of European Fixed Income,
Franklin Templeton Fixed Income

Justyna Tasic, Ph.D.

Senior Sustainability Manager
Franklin Templeton Fixed Income

Kasper Hanus, Ph.D

Senior Sustainability Manager,
Franklin Templeton Fixed Income

Ania Cwojdzinska, Ph.D.

Impact Analyst
Sustainability & Europe Fixed Income

Vadym Hornyi

Intern

Patryk Durand

Intern

Introduction

In this paper, the authors highlight the risks of separating environmental and social outcomes into distinct silos and showcase cost savings and climate resilience as potential benefits of integrating environmental safeguards into affordable housing projects.

International Capital Market Association (ICMA) guidelines and impact reporting metrics for construction projects, including affordable housing, are presented to emphasize the co-benefits of an integrated approach. The ICMA principles recognize climate change adaptation as an eligible category, creating a pathway for affordable housing projects with resilience features to access green and sustainability bond markets.

The conclusion stresses that social investments can deliver both financial returns and lasting environmental outcomes. By embracing social and environmental co-benefits today, investors can ensure resilient investment performance and deliver meaningful results.

IMPORTANT LEGAL INFORMATION

This material is intended to be of general interest only and should not be construed as individual investment advice or a recommendation or solicitation to buy, sell or hold any security or to adopt any investment strategy. All investments involve risks, including possible loss of principal. There is no guarantee that a strategy will meet its objective. Performance may also be affected by currency fluctuations. Reduced liquidity may have a negative impact on the price of the assets. Currency fluctuations may affect the value of overseas investments. Where a strategy invests in emerging markets, the risks can be greater than in developed markets. Where a strategy invests in derivative instruments, this entails specific risks that may increase the risk profile of the strategy. Where a strategy invests in a specific sector or geographical area, the returns may be more volatile than a more diversified strategy.

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