Funding God? UBI’s heretical social bond framework

UBI Banca includes financing for "religious entities" as an eligible category under its new social bonds framework, listing eligible organisations as those “aiming at reducing exclusions and inequalities”. But it would take a miracle for the world’s largest religions — with their central tenets of ‘we’re special and you’re not’ — to meet that requirement, raising the question of who actually qualifies.

  • By Craig McGlashan
  • 04 Dec 2018
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One of the "eligible social projects categories" in the green, social and sustainable bonds framework UBI Banca published on Monday is "non-profit and civil economy financing". All good and social so far.

But within the eligibility criteria for that section, alongside the usual non-governmental organisations and philanthropic entities, is the inclusion of "religious bodies for their social utility purposes (including maintenance and renovation of historic heritage)".

It’s anyone guess how that squares with the "target populations" section alongside it that says: “Eligible organisations are aiming at reducing exclusions and inequalities.”

Let’s take the example of the Roman Catholic Church, the overwhelmingly dominant church in Italy, UBI Banca’s home.

At the weekend, the Pope said that he was “worried” about the “serious matter” of homosexuality within the clergy. And it’s not just his staff’s sexual orientation that he thinks is his business — in 2013, he reiterated the church’s position that although being gay was not a sin, homosexual acts were.

Let’s just repeat that "target populations" line from UBI Banca’s framework: “Eligible organisations are aiming at reducing exclusions and inequalities.”

Although "maintenance and renovation of historic heritage" might only extend to a new lick of paint on Renaissance era frescoes, it still means extending finance to an organisation with anything but an inclusive view of sexuality. And we haven't even touched upon the decades that the church covered up countless instances of child abuse by members of its priesthood.

But to speak generally and avoid any accusation of anti-Catholic bias, the very foundation of every branch of Christianity as well as Islam — the two largest religions in the world — is that heaven is a place for their members only. It is one of the least inclusive stances imaginable.

UBI Banca — as well as any defenders of these religions out there — might argue that these bodies do a lot of charity work to alleviate poverty, boost education, and help in lots of other areas that seek to aid target populations that fit neatly into the social bond universe. That work often doesn’t discriminate against non-members of their faiths.

The framework itself appears to allude to that when it says that “eligible projects cannot include funding to organisations that discriminate in any way in carrying out their activities”.

In that case, any lending to religious entities under UBI’s social bond programme should only to be for those projects, much like energy companies can use funding from green bonds for renewable projects but not burning fossil fuels.

But really, there are plenty of non-religious bodies out there that will help, for example, the poor — regardless of their religion, sexuality, race or anything else. Once those organisations have all the funding they need, maybe then we can talk about lending to religious groups as some sort of social good.

  • By Craig McGlashan
  • 04 Dec 2018

All International Bonds

Rank Lead Manager Amount $m No of issues Share %
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1 JPMorgan 163,028.47 711 8.04%
2 Citi 160,005.15 642 7.90%
3 Bank of America Merrill Lynch 132,268.74 528 6.53%
4 Barclays 127,185.71 494 6.28%
5 HSBC 106,407.22 534 5.25%

Bookrunners of All Syndicated Loans EMEA

Rank Lead Manager Amount $m No of issues Share %
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1 Bank of America Merrill Lynch 12,912.95 35 6.60%
2 BNP Paribas 12,334.48 61 6.31%
3 UniCredit 11,196.47 58 5.73%
4 Citi 9,580.75 37 4.90%
5 Deutsche Bank 8,953.95 35 4.58%

Bookrunners of all EMEA ECM Issuance

Rank Lead Manager Amount $m No of issues Share %
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1 Morgan Stanley 5,579.06 26 10.66%
2 JPMorgan 4,866.13 28 9.30%
3 Goldman Sachs 4,405.13 21 8.41%
4 Citi 3,774.81 24 7.21%
5 UBS 3,602.23 16 6.88%