TAILIEUCHUNG - REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on European Social Entrepreneurship Funds

There are many classes of green bonds that have been issued or proposed, and they have taken on a confusing plethora of names such as green gilts, green retail bonds, green investment bank bonds, green infrastructure bonds, 46 multilateral development bank green bonds, green corporate bonds, green sectoral bonds, rainforest bonds and index-linked carbon bonds. One class of green bonds that has attracted attention recently is the climate bond, which is a type of green bond issued to raise capital for investments in projects which specifically mitigate or adapt to climate change. The labelling is designed to make it easier for. | À EUROPEAN COMMISSION Brussels XXX COM 2011 862 2011 0418 COD Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on European Social Entrepreneurship Funds Text with EEA relevance SEC 2011 1512 sEc 2011 1513 EN EN EXPLANATORY MEMORANDUM 1. CONTEXT OF THE PROPOSAL The principal aim of this proposal is to provide support to the market for social businesses by improving the effectiveness of fundraising by investment funds that target these businesses. Social businesses1 are an emerging sector in the EU. Social businesses are undertakings whose primary objective is to achieve social impacts rather than generate profits for shareholders or other stakeholders. In achieving social impacts social business seeks to build on business techniques - including business finance. While the sector is new it is characterised by rapid growth. According to the Global Enterprise Monitor 2009 report between 3 and of the workforce in selected EU Member States were employed in various forms of social businesses. Social businesses are almost exclusively SMEs. The social mission of social businesses correlates with a strong focus on sustainable or inclusive development and on tackling social challenges across EU societies this means that investment in social businesses are likely to have a greater positive social impact than investment in SMEs more general. Given some estimates such as by J. P. Morgan suggest social investments could grow rapidly to become a market well in excess of EUR 100 billion underlining the potential of this emerging Ensuring this sector continues to grow and flourish would therefore be a valuable contribution to meeting the objectives of the Europe 2020 Strategy. Social businesses derive significant proportions of their funding from grants whether from foundations individuals or from the public sector. As businesses however their sustainable growth depends on drawing on a wider range of investments and financing sources. In this .

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