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Sustainability Command Center 15 items

Sustainability-Linked Loan (SLLP) Structuring Checklist

Assess a sustainability-linked loan against the five core components of the Sustainability-Linked Loan Principles, including KPI selection and SPT calibration.

LMA/LSTA/APLMA Sustainability-Linked Loan Principles 2023

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Selection of KPIs

  • Are KPIs material to the borrower's core sustainability and business strategy? *
  • Are KPIs measurable, quantifiable, and externally benchmarkable? *
  • Is the scope and definition of each KPI clearly documented? *

Calibration of SPTs

  • Are Sustainability Performance Targets (SPTs) ambitious beyond a business-as-usual trajectory? *
  • Are SPTs benchmarked against the borrower's own performance, peers, or science-based references? *
  • Is the timeline for target observation dates and the baseline defined? *

Loan Characteristics

  • Is an economic outcome (e.g., margin adjustment) linked to achievement of the SPTs? *
  • Are provisions for KPI/SPT recalibration and declassification events documented? *
  • Is the loan structured so the sustainability characteristics are described in the facility documentation? *

Reporting

  • Does the borrower commit to reporting KPI performance at least annually to lenders? *
  • Is up-to-date information provided to allow lenders to monitor SPT performance? *
  • Is the methodology and baseline for calculating KPIs disclosed to lenders? *

Verification

  • Is independent external verification of KPI performance against SPTs obtained for each target date? *
  • Is the verification methodology and assurance provider disclosed? *
  • Is the verification performed by a qualified external reviewer with relevant expertise? *

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