Sustainability-linked derivatives: Difference between revisions
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(Add quote - source - The Treasurer - 2023 - Issue 4 - December 2022 - p41.) |
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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). | 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== | ==See also== | ||
* [[Corporate social responsibility]] | * [[Corporate social responsibility]] | ||
* [[CO2]] | |||
* [[Decarbonisation]] | |||
* [[Derivative]] | * [[Derivative]] | ||
* [[Emissions]] | |||
* [[Green Bond Principles]] (GBP) | * [[Green Bond Principles]] (GBP) | ||
* [[ESG]] | * [[ESG]] | ||
* [[Foreign exchange risk]] | |||
* [[Green bond]] | * [[Green bond]] | ||
* [[Key performance indicator]] (KPI) | * [[Key performance indicator]] (KPI) | ||
Revision as of 00:44, 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
- Decarbonisation
- 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
