ICMA and the Executive Committee of the Principles update the Q&As related to Sustainability-Linked Bonds


26 September 2023 The updated Q&As are based on input from the members of the Sustainability-Linked Bonds working group. They are published on ICMA’s website in the form of a stand-alone document, replacing the 2022 version, and will be integrated at a later stage to the Guidance Handbook (a separate announcement will be made in due course).

This additional guidance illustrates and complements the Sustainability-Linked Bond Principles (SLBP).

As a growing number of issuers across different sectors and regions embrace this instrument and look at ways of demonstrating their ambition and increase their accountability, this resource provides additional guidance on key considerations that can help meet these objectives while strengthening the credibility of the SLB market.

Compared to the 2022 version, the document:

  • provides additional guidance on the selection of Key Performance Indicators (KPIs) (4.2.4); on the calibration of Sustainability Performance Targets (SPTs) or the linkages between the plan and levers to advance those and the real economy (4.3.7, 4.3.8); on alternatives to coupon step-ups (4.4.2); on change of KPIs/SPTs (4.4.4, 4.4.7 to 4.4.10); on reporting requirements (4.5.3 to 4.5.6)
  • includes references to sovereign issuers where appropriate following the June 2023 edition of the SLBP (e.g.4.3.1)
  • reorders some of the Q&As initially located in section 5 and 7 (e.g. 4.2.7, 4.3.11)
  • enhances the initial drafting of a few answers to ensure clearness and conciseness.

Since the inaugural issuance in 2019, the SLB market has exceeded USD200 billion with over 90% issued from 2021 onwards. The appeal of SLBs is broad, with issuers from various sectors such as utilities and consumer goods, as well as sovereign issuers, entering the market, which underscores the universal recognition of the importance of sustainability across industries. The SLBP promote market integrity and transparency and are the de facto global issuance standard referenced by over 95% of SLB issuance internationally.

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