Green Loans and ESG-Linked Loan

Sustainable Finance Solutions for Corporate Loans

More often, companies are looking to finance environmentally-focused corporate initiatives with green loans. At the same time, many banks are expanding their product offerings through green lending.

The Green Loan Principles, issued by ICMA, define a "Green Loan" as any type of loan instrument made available exclusively to finance or refinance, in whole or in part, new and/or existing eligible green projects.

Align your green project to the four components of the Green Loan Principles:

Use of Proceeds
Management of Proceeds
Process and Project Evaluation
Reporting on Proceed

Typically, lenders recommend – and sometimes require – that borrowers get an external review of their Green Loan Framework from a recognized opinion provider to ensure alignment with the Green Loan Principles.

Sustainability Linked Loans or ESG Linked Loans are general corporate purpose loans used to incentivize borrowers’ commitment to sustainability and to support environmentally and socially sustainable economic activity and growth.

The Sustainability Linked Loan Principles helps borrowers align the characteristics of a sustainability linked loan (or ESG Linked loan) to the guidelines under the following core components:

Relationship to borrower’s overall CSR strategy

Measurement of borrower’s sustainability against sustainability performance targets

Publicly available reporting of sustainability performance targets

Sustainalytics is an industry leader in the ESG Rating space

Banks and other lenders often look to an issuer’s ESG Rating as a way to structure loans. The bank may choose to peg the loan's interest rate to the company's ESG Rating or use the ESG rating as a performance target within the terms of a loan. 

Issuers can also lower the cost of borrowing by working with banks that integrate a company's sustainability performance into their lending parameters. 

Our work on external reviews

Sustainalytics is the largest external reviewer of Green Bonds, Social Bonds, and Sustainability Bonds with more than 250 second party opinions issued. Our dedicated and experienced team of Sustainable Finance experts have worked with business and government entities across geographies and sectors to ensure that bond issuances are aligned with investors’ interests and accepted frameworks.

Sustainalytics is a leader in ESG Ratings and Sustainable Finance Solutions

Sustainalytics is one of the world’s leading providers of ESG ratings and research. Investment managers, pension funds, banks and other financial institutions integrate our ratings on more than 12,000 companies into their decision-making processes. Corporate issuers often leverage their Sustainalytics ESG rating for marketing, investor relations and capital raising.

Sustainalytics is the largest external reviewer of Green Bonds, Social Bonds, and Sustainability Bonds with more than 250 second party opinions issued. Our dedicated and experienced team of Sustainable Finance experts have worked with business and government entities across geographies and sectors to ensure that bond issuances are aligned with investors’ interests and accepted frameworks.

We are the market leader in Sustainable Loans, with over 40 companies using our ESG rating for over 20 Billion in ESG Linked, Sustainable Loans.

Working together

Our globally placed sustainable finance solutions team can support you in the process of applying for a green loan and obtaining a second opinion. Our team of experts is ready to answer your questions:

Green Loan
Framework

As you formulate a Green Loan Framework, our team of experts reviews the framework to ensure that it aligns with the Green Loan Principles, especially in the intended use of proceeds.

External Verification
(Second-Party Opinion)

We are an experienced second-party opinion provider and can qualify your project as green. Our second-party opinion ensures the green credentials of your use of proceeds.

Working together on your Sustainability-Linked Loan (ESG Linked Loan)

Our globally placed sustainable finance solutions team can help in the process of securing a Sustainability Linked Loan (or ESG Linked Loan). Our team of experts is ready to answer any questions that you may have:

Align your "loan" with the sustainability linked loan principles

With more than 250+ opinions in our portfolio, we are an experienced team of Sustainable Finance Experts. Issuers and lenders from around the world rely on Sustainalytics' second-party opinion services to help with green or sustainability linked loan frameworks. Connect with our team to align your loan framework with the Sustainability-linked loan (or ESG Linked loan) principles as defined by the Loan Market Association or LMA. 

Use the ESG Risk Rating as your Sustainability Performance Target (SPT)

Sustainalytics’ core business is producing research on ESG-related risk assessments across 12,000 companies worldwide. Investors use Sustainalytics’ research and ratings for investment research, portfolio management, portfolio analytics, issuer engagement and more. Using the ESG Risk Rating for your loan needs showcases your
commitment to sustainability and highlights improved performance to the investors.

Connect with our team

New York

125 Maiden Lane, Suite 602

+1 646 518 9623

London

29 Throgmorton St

+44 20 3880 0193

Tokyo

Marunouchi Kitaguchi Building 9th Floor
(c/o WeWork)
1-6-5 Marunouchi Chiyoda-ku

+813 4571 2343

Singapore

336 Smith St, #04-309
New Bridge Centre

+852 3008 2391