Sustainability-linked finance

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Sustainability-linked finance is designed to incentivise the borrower’s achievement of environmental, social, or governance targets through pricing incentives.

Launched in 2017, it has now become the fastest-growing sustainable finance instrument, with over $809 billion issued to date in sustainability-linked loans and bonds. Yet these instruments are still nascent in emerging markets, which represent only 5 percent of total issuance as at August 2022.

Links

Sustainability-Linked Finance— Mobilizing Capital for Sustainability in Emerging Markets PDF