Sustainability performance target

Sustainability Linked Loan Principles.

(SPT).

For the purposes of the Sustainability Linked Loan Principles, sustainability performance targets measure a borrower’s achievement of sustainability performance objectives.

The borrower’s SPTs may include key performance indicators, external ratings or equivalent metrics, which measure improvements in the borrower’s sustainability profile.

Sustainability linked loans will often align a borrower’s improved SPT performance to margin reduction over the life of the loan, or vice versa.

Examples of categories of SPTs include:

• Improvements in the energy efficiency rating of buildings or machinery used by the borrower.
• Reductions in greenhouse gas emissions in relation to products manufactured or sold by the borrower.
• Increases in the amount of renewable energy generated or the proportion of renewable energy used by the borrower.
• Water savings made by the borrower.
• Increases in the number of affordable housing units developed by the borrower.
• Increases in recycling rates or use of recycled raw materials or other supplies.

See also

• Corporate social responsibility (CSR)
• Loan Market Association (LMA)
• Sustainability
• Sustainability-Linked Loan Principles (SLLP)
• Use of proceeds bond

Other resource

Sustainability Linked Loan Principles, LMA - February 2023