Sustainability-Linked Financing  Intro

Sustainability-Linked Financing is on the rise. Corporates are looking for opportunities to increase value and drive impact by accelerating investments in sustainable and social developments.

You can leverage your ESG Rating:

  • To assess how you stack-up versus peers
  • As a KPI within ESG-linked loans or credit facilities
  • To support debt issuance programs

Sustainability-Linked Loans


Sustainability-Linked Financing Table

Purpose

Purpose

Create a time-bound financial link (via the interest rate) between a borrower's ESG target and its achievement.

Use of proceeds

Use of Proceeds

General-purpose use

Interest rate

Interest Rate

Industry rate changes based on success or failure in achieving ESG-linked target.

Borrower industry

Borrower Industry

Across industries

Benefit to Issuer/Borrower

Benefit to Issuer/Borrower

Potential for lower interest rate if target is achieved

Benefits to Investor/lender

Benefits to Investor/Lender

Potential for higher interest rate if borrower does not meet target

Interest rate

Size of Market

~USD 100 Billion


*Total for 2019 Source: MSCI ESG Research

Source: 2020 ESG Trends to Watch, MSCI ESG Research, January 2020

 


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