ICMA publishes voluntary guidelines for sustainability-linked bonds (SLBs)

Jun 16, 2020

The International Capital Markets Association has published Sustainability-Linked Bond Principles, announced on 9 June 2020. 

These are voluntary process guidelines for issuing sustainability-linked bonds (SLBs).

SLBs are defined as forward-looking performance-based bond instruments where the issuer is committing to future improvements in sustainability outcomes within a predefined timeline. Their purposes is to further develop the key role that debt markets can play in funding and encouraging companies that contribute to sustainability (from an Environmental and/or Social and/or Governance perspective, “ESG”). 

The Principles provide guidelines that recommend structuring features, disclosure and reporting. They are intended for use by market participants and are designed to drive the provision of information needed to increase capital allocation to such financial products. They are applicable to all types of issuers and any type of financial capital market instruments. 

ICMA have also expanded the categories of social projects and incorporated recent guidance for social bonds addressing COVID-19.

Separately, a collection of Social and Sustainability Bond Case Studies has been published.

The following publications have also been updated: