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 Financing Table
Create a time-bound financial link (via the interest rate) between a borrower's ESG target and its achievement.
Use of Proceeds
Industry rate changes based on success or failure in achieving ESG-linked target.
Benefit to Issuer/Borrower
Potential for lower interest rate if target is achieved
Benefits to Investor/Lender
Potential for higher interest rate if borrower does not meet target
Size of Market
~USD 100 Billion
*Total for 2019 Source: MSCI ESG Research
Source: 2020 ESG Trends to Watch, MSCI ESG Research, January 2020
Featured Content - Second-Party Opinions
Over the last few years, sustainable debt financing – a previously niche market - has experienced remarkable growth. Along the way, there has also been a rapid expansion in the objectives and definitions of sustainable financing instruments.