Sustainable Lending

Private finance has a critical role to play in catalysing the transition to a sustainable global economy.  At the LMA, we are dedicated to promoting growth and innovation in sustainable lending practices, and supporting the syndicated loan market as new sustainable finance regulation emerges. Our ongoing initiatives include:

  • documentation projects, including the release of model provisions for sustainability-linked loans, together with work on the preparation of an accompanying term sheet and a template mandate letter for sustainability coordinators;
  • supporting the development of market practice, including the publication of updated versions of the Green, Social and Sustainability-Linked Loan Principles and accompanying guidance documents;
  • responding to regulatory proposals in relation to sustainable finance; and
  • attending and hosting various sustainable finance events.

Latest News

On 26 January 2024, we submitted our response to the Financial Conduct Authority’s consultation on its proposed ‘Guidance on the Anti-Greenwashing Rule’.

Although the Anti-Greenwashing Rule and the Guidance does not apply directly to the loan market, authorised firms may make sustainability-related claims about loan products and related services. 

Our response includes key suggestions for the FCA in respect of the Guidance.

 

External Review Guidance for Green, Social and Sustainability-linked Loans

We are pleased to announce the publication of the second edition of the ‘External Review Guidance for Green, Social and Sustainability-linked Loans’, produced in collaboration with the APLMA and LSTA.

Confusion around different types of external review, and in particular related terminology, act as potential barriers to the success and integrity of sustainable lending markets.  With the rapid evolution of sustainable finance products, and the external reviews attached to them, an extensive update was required.  This update will bring about increased clarity and transparency for the most common types of external review used in the loan market.  The hope is this in turn will generate increased liquidity to sustainable finance more broadly.

 

ESG Monthly Newsletter January 2024

On 12 January 2024 we launched the latest edition of our ESG Monthly Newsletter, which includes a video round-up of the latest ESG news from the LMA and across the market by Hannah Vanstone, together with the following:

  • What's Trending Now
  • Fact of The Month
  • Regulation
  • Resources
  • Briefings
  • Legal & Regulatory News

An Introduction to Green Loan Frameworks

We are delighted to announce the publication of 'An Introduction to Green Loan Frameworks' (the Guide), an educational piece offering direction on green loan frameworks, as referenced in the February update of the Green Loan Principles (GLP). 

The Guide establishes the structure and purpose of a green loan framework, which is to evidence alignment with the four components of the GLP, as well as the overarching objectives and alignment of projects with taxonomies and eligibility criteria. We have worked with experienced members of our ESG Committee to ensure that the Guide reflects loan frameworks seen in the market. 

We have now submitted our response to the European Commission’s targeted consultation on the implementation of the Sustainable Finance Disclosures Regulation (SFDR).

We strongly support the EU’s sustainable finance objective of attracting private investment to support the transition to a sustainable, climate-neutral economy.  We believe the SFDR has a key role to play by providing transparency to investors about the sustainability risks associated with investments.  However, there have in practice been some issues with the implementation of the SFDR.  A number of key concerns are addressed in our response to the targeted consultation. 

 

LMA Publishes the Sustainable Lending Glossary

We are delighted to announce the publication of our updated Sustainable Lending Glossary, produced in conjunction with the LSTA and APLMA.

The glossary will aid the transparency of terms in the rapidly evolving sustainable lending market through defining pertinent terms in this space.

 

Briefings

Transition Finance: Briefing Update

In this briefing, Baker McKenzie looks at the progress of transition finance and considers the European Commission's recent recommendations to both businesses and the financial sector to support its adoption. 

Reorg H1 2023 European Sustainability-Linked Loans Wrap

In this briefing, Reorg provide a reflection on the H1 2023 European leveraged sustainability-linked loan market, highlighting changes in issuance levels and identifying a number of trends in their documentation.

Transition Finance: New Opportunities and Challenges for Financial Institutions

In this briefing, Baker McKenzie consider the growing emergence of Transition Finance products, highlighting how these alternative products can aid the transition of hard-to-abate sectors, the risks and opportunities surrounding these product, as well as the imperative that borrowers ensure they have a credible, net zero aligned, transition plan.

Video Content

ESG Monthly Update - Green Newsletter

February 2024, update hosted by Max Griffiths

Sustainable Finance Webinars

sustainable-finance-webinar-slider-image.jpg

Seminar on the LMA’s sustainability-linked loan rider

sustainable-lending-evening-seminar-851x479.jpg

The Politics of ESG: Will action meet expectation?

With David Chmiel – Global Torchlight

The-Politics-of-ESG.jpg

An introduction to nature-related risk

With Hannah Vanstone – LMA & Dr Rhian-Mari Thomas OBE – Green Finance Institute

Spotlight-An-intrioductions-to-nature-related-risk.jpg

ESG trends in leveraged loans

With Gemma Lawrence-Pardew – LMA, Emma Norman – Invesco, Pathik Gandhi – Linklaters and Jacob Mi...

ESG-Tends-leveraged-loans.jpg

Innovation in Acquisition Financing: Europe's first ESG unitranche

With Gemma Lawrence-Pardew – LMA & Alice Foucault – BaringsWith

Innovation-Acquisition-Financing-851.jpg

Sustainability in the new world

Sustainability-in-the-new-world.jpg

Sustaining sustainability: have the foundations been laid for a green recovery?

From the LMA Syndicated Loans virtual conference (22-23 September 2020).

sustaining_sustainability.jpg

You need to log-in to view this video.

Spotlight on transition finance: bridging the gap between green and brown

Spotlight_on_transition_finance_bridging_the_gap_between_green_and_brown.jpg

Spotlight on Data - the missing piece?

This webinar lasts approx 20 minutes and is an interview with Todd Arthur Bridges, Partner and Global Head ...

Data-missing-piece.jpg