Sustainability-linked loan (SLL)

    ESG & Governance

    A bank loan whose interest margin moves up or down depending on whether the borrower meets agreed sustainability targets.

    SLLs work like SLBs but are private loan contracts. The Sustainability-Linked Loan Principles of the main loan market associations set out the building blocks: material KPIs, ambitious targets, a margin adjustment, yearly reporting and independent verification. Because they are private, SLLs are much less visible than bonds, and their terms are rarely published in full.

    Related terms