Investing in social outcomes UBS white paper on Social Impact Bonds – Perspectives for Brazil

Corporations have taken on a growing responsibility towards their communities. They are venturing for impact, aligning their values and interests with positive outcomes for their communities and for the environment.

At UBS, this involvement has been especially present through the Optimus Foundation – the philanthropic arm of the bank – as well as through various impact-investing initiatives across divisions of the bank. Those initiatives include the structuring and launch of Social Impact Bonds (SIBs). In Brazil, UBS's Impact Investing strategy supports the development of the Impact Investing ecosystem locally through partnerships, sponsoring and research. UBS is honored to be a member of the Brazilian SIB Advisory Council and contribute to the collaborative effort to launch the first SIBs in Brazil.

Social Impact Bonds

Executive summary

This UBS white paper provides insights into the financial structuring of Social Impact Bonds (SIBs) and the role banks can play in this segment – a theme that is often overlooked. Moreover, the report proposes some key considerations to structure the first SIB in Brazil, considering the specificities of investment and social service delivery in the country.

The paper is based on international best practices and lessons learned from existing SIBs, particularly Development Impact Bonds (DIBs) focused on education in Rajasthan, India and the SIB focused on diabetes in Israel, where UBS was closely involved.

SIBs are also known as Pay for Success projects in the US, Social Benefit Bonds in Australia, and Social Impact Contracts in France and Brazil (Contrato de Impacto Social, CIS). DIBs are a variation on the theme, where the outcome payer is not a government but can include foundations or not-for-profit entities. In this paper, we use SIBs to refer to all those different instruments.