Sustainability-linked bond (SLB)
ESG & GovernanceA general-purpose bond whose financial terms, usually the coupon, change depending on whether the issuer meets predefined sustainability targets.
The money from an SLB can be used for anything. Instead, the issuer commits to company-wide key performance indicators, such as emissions intensity, and to targets for them. If it misses a target by the observation date, the coupon usually steps up. SLBs follow ICMA's Sustainability-Linked Bond Principles and, in India, SEBI's June 2025 ESG debt framework. India's first SLBs, from UltraTech Cement, Adani Electricity Mumbai and JSW Steel in 2021, were sold overseas in US dollars.
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