Orange gender bonds set to increase in 2026
Orange gender bonds are gathering momentum globally and more could be issued in 2026 in Japan, as the country's newly elected female political leadership is expected to focus on closing the country's gender gap. Further issuance could also be seen in emerging markets.
The election of Japan's first female prime minister, Sanae Takaichi, in October and her appointment of Satsuki Katayama as the country's first female finance minister was a significant milestone for the country. Her administration is expected to prioritise gender equality to boost women's participation in the workforce.
Orange gender bonds channel capital to projects advancing gender equality and women’s empowerment and represent the UN's Sustainable Development Goal number five for gender equality and women's empowerment, linking finance to social impact.
"We might see other Japanese companies issuing orange gender bonds, particularly in labour-intensive industries such as retail and services because human capital disclosures are mandatory and investors and society want to see more concrete action," said Maiko Todoroki, president and CEO of Poppins Corporation, a listed Japanese company that provides child and elderly care services.
Japanese trading house ITOCHU issued Japan's first orange bonds in September to promote women's advancement and more are expected to follow next year as Japan continues to lag on female representation and needs to encourage more women into the workplace to counter falling demographics.
The deal focused on establishing long-term gender-inclusive workplaces, investment in and procurement of products from companies that promote women’s advancement; and companies that provide services and products contributing to gender equality, including investments in Femtech businesses and the procurement of Femtech products.
"ITOCHU's orange bond was a milestone for Japan's capital market. It demonstrated for the first time in a very concrete way that women's empowerment is not just a corporate and social responsibility theme but sits firmly within the realm of investment and capital allocation," Todoroki said.
In the 2025 global gender gap index, Japan ranked 118th out of 148 countries – the lowest of the G7 nations – and it has one of the largest gender pay gaps in the developed world, at around 22%.
While the country is making significant progress on issuing labelled transition finance to back its ambitious US$1trn GX green transformation plan, it is currently missing gender targets.
Japan is behind on a 2023 government target for companies on the Tokyo Stock Exchange’s Prime Market to reach 30% female representation on boards by 2030. It also aims for all Prime-listed companies to have at least one female executive by 2025.
Sustainability-linked structures could possibly be introduced to incentivise faster progress and address the country's chronic shortage of childcare places to allow women to have careers after having children.
"Japan has a target to have 30% women in management by 2030 which the government has placed on all listed companies, but we are quite far off. We have the KPI but there is no penalty, so I think that is something that we need to see," Todoroki said.
Poppins was listed on the Tokyo Stock Exchange in December 2020 and was Japan’s first IPO to link to the UN's SDGs.
Emerging markets
Nine orange bonds have been issued totalling about US$1.5bn globally since January 2020, according to the Impact Investment Exchange. IIX is a member of the Orange Bond Initiative, a global coalition including development finance institutions that developed orange bond principles in 2022.
Orange bonds issued to date have also been targeted at emerging or developing markets such as Guatemala, Sri Lanka, Indonesia, Cambodia and Vietnam, as well as broader regions, including south Asia, southeast Asia, and sub-Saharan Africa, according to a recent report by Sustainable Fitch.
"Future issuance will depend on several factors including national sustainability strategies, corporate issuer strategies, investor demand, and the clarity of frameworks," said Melissa Cheok, associate director at Sustainable Fitch.
The colour orange – or amber – is also being applied to transition finance. India's National Stock Exchange is preparing to issue green equity criteria that will offer an orange classification for transition companies in hard to abate sectors, which could potentially cause some confusion.
"Clear frameworks, robust reporting, and alignment with recognised principles are the best safeguards, regardless of colour terminology," Cheok said.