View source for Sustainability-linked derivatives

''Sustainability - sustainability-linked contracts - derivatives.''

(SLD).

A sustainability-linked derivative is a derivative contract incorporating payment cashflows referenced to key performance indicators (KPIs) measuring environmental, social and governance performance against pre-agreed targets (ESG targets).


"Lloyds Bank has also helped to further the development of the sustainability-linked derivatives market, with a sustainability-linked foreign exchange transaction that supports UK leisure travel company Jet2’s decarbonisation ambitions.

For Jet2, the SLDs enable it to mitigate FX risk from operations – just like a standard derivative –
while gaining pricing benefits as long as it delivers on its ESG goal of reducing CO2 emissions per
passenger-kilometre travelled."

''The Treasurer, December 2023, Issue 4, p41.''


==See also==
* [[Corporate social responsibility]]
* [[CO2]]
* [[Decarbonise]]
* [[Derivative]]
* [[Emissions]]
* [[Environmental, social and governance]]  (ESG)
* [[Foreign exchange risk]]
* [[Green bond]]
* [[Green Bond Principles]] (GBP)
* [[Key performance indicator]]  (KPI)
* [[Social bond]]
* [[Social impact bond]]
* [[Sustainability]]
* [[Sustainability bond]]
* [[Sustainability Bond Guidelines]] (SBP)
* [[Sustainability-linked bond]]  (SLB)
* [[Sustainability-Linked Loan Principles]]  (SLLP)
* [[Sustainability performance target]]
* [[Use of proceeds bond]]

[[Category:Financial_products_and_markets]]