Sustainable Finance Products for Banks and Lenders
Sustainable Finance Services for Banks and Lenders
About Sustainability Linked Loan
A sustainability linked loan (SLL) is a loan instrument that incentivizes the corporate borrower to achieve agreed upon sustainability performance objectives, such as an improved ESG rating.
Sustainability linked loans represent a structured, practical way for commercial and investment banks to expand their lending portfolios as well as meet and improve your own sustainability credentials.
How Sustainability Linked Loans work
The lender and borrower work together to set the sustainability performance targets (SPTs) and for the loan.
SPTs should be meaningful to the business and related to borrower’s overall CSR (sustainability) goals.
The loan terms (primarily interest rate) is tied to a borrower’s sustainability performance.
Lenders incentivize borrower’s performance over the period of the loan.
Leading banks leverage ESG Ratings (and improvements in the borrower’s score) as a key metric and a performance indicator.
Sustainability Linked Loans as an instrument of sustainable commitment
Globally, banks and lenders use ESG ratings and data to identify lower-risk borrowers and meet sustainable financing goals.
- Sustainability linked loans provided a structured way to expand your lending portfolio and improve your sustainability credentials
- Sustainability linked loans provide a financial incentive to companies keen to improve their ESG performance, hence reducing overall debt costs.
- Offer your clients the flexibility and a potential to access capital at a lower cost.
Learn about the revolving credit facility created together by ING and Philips - the first deal in the syndicated loan market where the pricing is linked to a Sustainalytics ESG rating.
Helping you meet your Sustainable Lending Goals
Sustainalytics’ team of expert industry analysts assess corporate sustainability performance, providing investors insight on companies’ exposure to and management of material environmental and social issues.
As your Sustainability Performance Loan partner, we will assess borrowers’ eligibility, providing credible third-party ESG ratings and annual assessment updates.
Structure your Sustainable Portfolio
Our team will work closely with you to set performance targets for your ESG loans. We will help you understand the advantages or risks associated with your lenders.
We will assess companies’ performance on ESG factors, their scores and compare it with your peers. We will help you identify the potential red flags in case of a borrower under-performance, and check borrower’s involvement with major controversies if any.
Corporate ESG Ratings Licence
Your client’s can get in touch with us to get their ESG Ratings Licence. A good ESG Ratings Score can have a positive impact on overall Debt raising costs.