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.
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.
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.
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
- Legal & Regulatory News
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.
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.