Sustainability-Linked Loans

A sustainability-linked loan is a corporate loan where the terms of the loan are linked to your sustainability goals. A high target attainment gives lower interest rates and a low target attainment gives higher interest rates. The loan is available to all sectors, but it requires an ambitious sustainability strategy with clear goals.

What does this mean for your business?

By linking sustainability goals to the terms of the loan, you highlight the company’s sustainability ambitions. This strengthens the credibility of your sustainability strategy and can increase commitment to sustainability. It also sends a clear signal to stakeholders such as customers, suppliers, investors, authorities and employees.

Who is this suitable for, and how does it work?

Sustainability-Linked Loans are suitable for businesses that want to set ambitious sustainability goals that are important to the business. This should include both short-term and long-term milestones that go beyond statutory requirements.

The process for a sustainability-linked loan

1. We agree on indicators (KPIs) that are important to your business and connected to your sustainability strategy. For example, this may be the company’s greenhouse gas emissions.
2. We set annual targets for each KPI until the loan matures.
3. You report the target attainment to us annually, and your auditor verifies this.
4. The loan margin is adjusted up or down based on the annual target attainment.

If you would like more information about a sustainability-linked loan, please contact your customer adviser at the bank.

DNB has been offering sustainability-linked loans since 2018. We follow the LMA/LSTA principles and guidelines for Sustainability Linked Loan Principles Our experts in sustainable finance will help you take out this kind of loan, while also ensuring that we follow best market practice.