Social Bonds as Funding for Swedish Real Estate Companies

Abstract: With the stakeholder model, the responsibility that companies have in society extends beyond yielding profit to their shareholders. They are also responsible for the environmental and social impact their operations may have, requiring a new type of financing with this kind of commitment in mind. Green bonds are already used extensively in Sweden, especially within the real estate sector regarding green investing and has been well researched. Social investments and social bonds on the other hand, even though there is a growing interest, are not widely applied in the Swedish real estate market. At the same time, the subject remains uncharted by researchers. With a deductive approach using semi-structured interviews with real estate professionals, debt investors, and researchers, this thesis aims to answer why Swedish real estate companies are not using social bonds and what can be done to facilitate its use. The main findings are that social investments and bonds are competing with green bonds, preventing their application. Another hindrance is finding relevant and easily measurable KPIs for social bonds.