Sustainability-Linked Format: Deep Dive into Sustainability-Linked Loans and Similar Format Transactions

Aaron Franklin

Chapter Chapter 4 in Structuring Sustainable Finance Transactions, 2025, pp 125-163 from Springer

Abstract: Abstract The sustainability-linked format generally refers to any transaction with adjustments to its financial characteristics depending on the company’s performance on sustainability-related performance measures. Companies typically pursue such transactions to capitalize on perceived increased demand, but also to benefit from cost savings. Certain principles apply to the structuring of transactions in this format, regardless of the sustainability topics chosen as the focus. Execution of these transactions varies based on the type of financing.

Keywords: Key performance indicators; Sustainability performance targets; Performance-based margin adjustment; Sleeping sustainability-linked loans; Sustainability-Linked Loan Principles; Sustainability-Linked Bond Principles (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1007/978-3-031-87631-8_4

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