Sustainability-linked bond

Sustainability - sustainable bonds - International Capital Market Association (ICMA).

(SLB).

ICMA defines and explains sustainability-linked bonds as:

".. any type of bond instrument for which the financial and/or structural characteristics can vary depending on whether the issuer achieves predefined Sustainability / ESG objectives.

In that sense, issuers are thereby committing explicitly (including in the bond documentation) to future improvements in sustainability outcome(s) within a predefined timeline.

SLBs are a forward-looking performance based instrument.

"Those objectives are (i) measured through predefined Key Performance Indicators (KPIs) and (ii) assessed against predefined Sustainability Performance Targets (SPTs).

"The proceeds of SLBs are intended to be used for general purposes, hence the use of proceeds is not a determinant in its categorisation. Regardless, in select cases, issuers may choose to combine the GBP/SBP approach with the SLBP.

Thus, please note that SLB are not to be confused with Sustainability Bonds (i.e. Use-of-Proceeds bonds)."

International Capital Market Association - Sustainability-Linked Bond Principles (SLBP)

See also

• Corporate social responsibility
• Green Bond Principles (GBP)
• Environmental, social and governance (ESG)
• Green bond
• International Capital Market Association
• Key performance indicator
• Loan Market Association
• Retail bond
• Social bond
• Social impact bond
• Sustainability
• Sustainability bond
• Sustainability Bond Guidelines (SBP)
• Sustainability-Linked Bond Principles (SLBP)
• Sustainability-linked derivatives (SLDs)
• Sustainability-Linked Loan Principles (SLLP)
• Sustainability performance target
• Use of proceeds bond

Other resource

• Sustainability Linked Bond Principles, ICMA - 2024