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The Green, Social and Sustainability-Linked Loan Principles (together the “Loan Principles”) specify the criteria that qualify a loan as green, social or sustainability-linked.  Although closely adhered to in practice, they are not regulatory requirements – rather voluntary recommended guidelines aimed at protecting the integrity of the sustainable loan market. The Loan Principles are reviewed on a regular basis to keep pace with market practice and the evolution of sustainable loan products.

New versions of all of the Loan Principles and related guidance were published on 23 February 2023, reflecting the conclusions of the latest review. There are a significant number of changes, but many of the amendments simply expand and add colour to previous content or are aimed at aligning the drafting more closely to the text of ICMA’s equivalent guidelines for the bond market.    

In these two briefings, we consider the key changes made to (i) the Green and Social Loan Principles and (ii) the Sustainability-Linked Loan Principles, and the impact of these changes on current and future transactions.