Sustainability-linked bonds aim to further develop the key role that debt markets can play in funding and encouraging companies that contribute to sustainability (from an environmental and/or social and/or governance perspective).
The Sustainability-Linked Bond Principles provide guidelines that recommend structuring features, disclosure and reporting. They are intended for use by market participants and are designed to drive the provision of information needed to increase capital allocation to such financial products. The SLBP are applicable to all types of issuers and any type of financial capital market instruments. The 2024 version of the SLBP includes clarifications to support KPI selection and a reference to the KPI Registry (notion of core vs. secondary KPIs). It also integrates new definitions in the glossary. Finally, Appendix II, the SLB disclosure data checklist, has been slightly updated to bring more clarity on the expected disclosure.
For additional information on how to interpret this guidance especially for its practical application for transactions, as well as in the context of market developments, see the Guidance Handbook.
The Sustainability-Linked Bond Principles (SLBP) 2024
Issuers are also encouraged to complete the Sustainability-Linked Bond information template that gives a summary reflecting the main characteristics of a Sustainability-Linked Bond and illustrating its key features in alignment with the core components of the SLBP. This contributes to market transparency and clarifies issuers’ alignment with the Principles. Completed templates can be made available in the Sustainable bond issuers database.
Translations of the Sustainability-Linked Bond Principles
The following are translations of the 2020 edition of the SLBP unless otherwise specified. Further translations are in progress and are being published here as they become available.
The Illustrative KPIs Registry is an excel spreadsheet that includes high-level recommendations as well as illustrative examples for the selection of Key Performance Indicators (KPIs) for Sustainability-Linked Bonds (SLBs). This work has been performed by the SLBP KPI sub-working group. In June 2023, the SLB WG enriched the Registry with additional KPIs related to social themes as well as KPIs for sovereign issuers. In June 2024, the SLB WG continuously enriched the registry with additional KPIs related to environmental themes (biodiversity, circular economy/raw materials and water) as well as additional KPIs for sovereign issuers. 
Prior to selecting the KPIs, it is recommended to read the “note to users” in the first tab which explains the structure of the document and the methodology applied for the classification of the KPIs. The 2024 update gives more details on the definition of core vs. secondary KPIs.
The examples in the table are illustrative only and are not intended to be the exclusive approach for the selection of KPIs for SLBs. They represent samples of KPIs and are therefore not exhaustive. Besides, these KPIs have varying degrees of maturity and market adoption. However, we draw attention to the breadth of examples, and we believe this will serve to help arrangers, issuers and investors in their design and assessment of SLBs.
Global and sector benchmarks and initiatives are provided to guide market participants in the understanding of material issues, definition of calculation methodologies and/or calibration of their targets. It is well recognised that some of the suggested core & secondary KPIs in the table have not reached a satisfactory level of maturity (from a methodology, data availability or benchmarkability perspective) to be considered as ready to be used. They, nonetheless, are presented in this table as the suggested ideal KPIs to ensure abidance by the core, relevant and material principles.
This document should be seen as live, i.e. it will evolve over time. The pace of regulatory change and data harmonisation will continue to increase and as such ESG metrics and SLBs will evolve and develop. and see regular updates over the coming years.
The SLB WG welcomes feedback (to sustainabilitybonds@icmagroup.org) and will continue to monitor developments in the SLB market and evaluate if updated guidance is warranted.
The SLB disclosure data checklist is an excel spreadsheet that provides some guidance with a thematic lens. This table is set up as a guiding, non-exhaustive and non-prescriptive checklist of elements that are recommended or deemed necessary to be disclosed in the context of the issuance of an SLB.
The objective is to provide guidance for issuers of SLBs to align their disclosure around comparable language and data points to ensure the appropriate degree of transparency and harmonisation as sought by the investors and other players in the marketplace.
Post issuance, issuers are encouraged to upload their SLB data based on this checklist (as set out under both tabs “Issuance Overview” and “SLB Template”) on ICMA’s website. To that end, completed excel files can be sent by email to sustainabilitybonds@icmagroup.org.
