Sustainability-Linked Products Are Increasingly Popular Sustainability-linked loans (SLLs) and bonds (SLBs) are growing in popularity among corporates as a tool to raise capital while publicly declaring their intention to improve environmental or social performance targets. The establishment of international principles on sustainability-linked debt in the past few years has led to a rapid expansion in borrowers using these structures. They offer companies some flexibility in identifying areas where sustainability practices can be improved, while not binding them to a strict use of proceeds. Expanding Range of Sectors and Sustainability Targets The sectors represented by borrowers of SLLs, initially dominated by energy companies with targets linked to greenhouse gas (GHG) emissions, has broadened. This has led to increased diversity in the type of key performance indicators (KPIs) to which the facilities are linked, with greater incorporation of social and non-emissions environmental targets. Policy and Regulatory Support for Sustainability-Linked Structures Regulators and stock exchanges in several major financial markets have introduced mandatory environmental and sustainability reporting requirements for companies. As more large firms disclose and monitor non-financial metrics, it becomes easier for them to enter into borrowing arrangements tied to improving against those metrics.