Update to Sustainability Linked Loan Guidance

The LSTA, LMA and the APLMA - the industry bodies behind the Green Loan Principles and the Social Loan Principles -  have today (27 May) published a revised version of the Sustainability Linked Loan Principles (SLLP) and accompanying Guidance on Sustainability Linked Loan Principles (SLLP Guidance), which were originally published in May 2020. 

These amendments seek to further promote the transparency and consistency of SLLPs in the market, by updating the structure of the key components of the SLLPs to the following, in order to further align this structure to the Sustainability Linked Bond Principles components: 

1. Selection of KPIs
2. Calibration of SPTs
3. Loan Characteristics
4. Reporting 
5. Verification 

Notably on these structural changes, the substance of the requirements have not changed since the original SLLPs and all transactions that are completed prior to 3 June 2021 will be exempt from the updated SLLPs (and instead its alignment to the original SLLPs can be reviewed).

Helpfully, the SLLPs have also included additional example KPIs that borrowers can consider when structuring their KPIs and ambitious sustainability performance targets (SPTs).