Sustainability-linked derivatives: Difference between revisions
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Latest revision as of 00:45, 5 December 2023
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
- Green Bond Principles (GBP)
- ESG
- Foreign exchange risk
- Green bond
- 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
