| A sustainability-linked loan is a loan type wherein the loan cost is linked to the borrower’s agreed-upon sustainability-performance targets (SPTs). The borrower’s sustainability performance is measured against pre-determined key performance indicators (KPIs), and preferential interest rates (PIRs) are granted upon achieving the SPTs. Unlike green loans, which are allocated to environmentally or socially responsible projects, SLLs are general corporate purpose loans defined by the borrower’s performance against predefined SPTs, rather than the use of proceeds. Source: Xia et al. (2025) |
Sustainability-Linked Loan (SLL)
