Green, Social and Sustainable (GSS) Bonds in Israel
GSSS (Green, Social, Sustainable, Sustainability-Linked) Bonds are one of the most growing financial instruments in the past decade in global financial markets. These bonds have the potential to stream capital towards social and climate-related ends and scale up the ability of investors and stakeholders to influence social and climate goals.
Unfortunately, the GSSS bond in Israel is stumbling when compared to foreign GSSS bond markets due to various barriers and the lack of proper incentives. In the research, I review risks and opportunities for the growth of a GSSS Bonds market in Israel while assessing policy recommendations that governmental institutions can extend.
In the short-term period, recommended:
- Presenting investors and issuers with clear standards (preferably adopting existing international standards) for the issuance of GSSS Bonds
- Issuing a sovereign GSSS Bond
In the long-term period, conditioned on reassessment and preliminary growth of the GSSS Bond market in Israel, and to attract foreign investors, the following tax incentives based upon Municipal Bonds tax relief in the USA is recommended:
- Providing bondholders with tax relief on GSSS Bonds’ Coupon
- Providing bondholders (issuers) with a tax credit on GSSS bond holdings (issuing)