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In just two years, Sustainability-Linked Bonds (SLBs) have grown exponentially. These innovative products have been rapidly adopted by companies committed to net zero and wishing to accelerate their transition towards more sustainable business practices and operating models.
Given the vast amounts of funding required to finance the transition of our economies, these new bonds, which raise money not for a specific project but for a company to implement its overall sustainable transition strategy, are increasingly being used. Each SLB must define a specific set of Sustainability Performance Targets (SPTs) and Key Performance Indicators (KPIs). Should the issuer not meet these predefined sustainability objectives within the set timeframe, certain penalties come into play,...
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