A social impact bond is not a bond, per se, since repayment and return on investment are contingent upon the achievement of desired social outcomes; if the objectives are not achieved, investors receive neither a return nor repayment of principal. SIBs derive their name from the fact that their investors are typically those who are interested in not just the financial return on their investment, but also in its social impact.
The trend of investing in the social environment and society has risen in recent years and has become a way for investors to give back to the community, as well as a way for companies to expand their social responsibility. It’s a way to increase community involvement and awareness of social issues.