Sustainability-linked loans’ targets increasingly sophisticated, science-based

SUSTAINABILITY-LINKED debt in Singapore increasingly incorporates targets that are more sophisticated and science-based, in line with the growing number of net-zero commitments, industry players told The Business Times.

While details of specific loan transactions are confidential, observers and market participants say that sustainability-linked loans (SLLs) here are increasingly factoring in such targets – with their uptake showing that corporates are also cognisant of the financial benefits of improving their sustainability practices over time.

SLLs and sustainability-linked bonds vary the interest that borrowers must pay depending on the borrowers’ performance against key performance indicators (KPIs).