Sustainability-Linked Loan Principles Supporting environmentally and socially sustainable economic activity

Abstract

sustainability linked loan principles sustainability linked loan principles march 2019 introduction sustainability linked loans aim to facilitate and support environmentally and socially sustainable economic activity and growth. the sustainability linked loan principles (sllp) have been developed by an experienced working party, consisting of representatives from leading financial institutions active in the global syndicated loan markets. the goal of the sllp is to promote the development and preserve the integrity of the sustainability linked loan product by providing guidelines which capture the fundamental characteristics of these loans. in doing so, the purpose of the sllp is also to promote sustainable development more generally. the sllp are voluntary recommended guidelines, to be applied by market participants on a deal-by-deal basis depending on the underlying characteristics of the transaction. the sustainability linked loan product enables lenders to incentivise the sustainability performance of the borrower. the sllp are intended for broad use by the market, providing a framework within which the flexibility of the loan product can be maintained, and will be reviewed on a regular basis in light of the development and growth of sustainability linked loans. sustainability linked loan definition sustainability linked loans are any types of loan instruments and/or contingent facilities (such as bonding lines, guarantee lines or letters of credit) which incentivise the …

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