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ARTICLE · 09 MAY 2023

Market Practice For Sustainability-Linked Loans Continues Its Evolution

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Sustainability-linked loans (SLLs) have gained significant traction in Canada and the U.S. in recent years. Since their market debut, the SLL market has grown to $747 billion...

CanadaFinance and Banking
Amanda Balasubramanian
Amanda Balasubramanian
Jonathan Wiener
Jonathan Wiener
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Sustainability-linked loans (SLLs) have gained significant traction in Canada and the U.S. in recent years. Since their market debut, the SLL market has grown to $747 billion, making it the second-largest sustainable debt asset class after green bonds1. While the key performance indicators (KPIs) and sustainability performance targets (SPTs) in these loan products are bespoke to each borrower, market practice has been developing around the criteria for the SLL product, the roles of the lenders in the development of this feature and the relevant credit documentation.


Since 2019, the Sustainability Linked Loan Principles (SLLP), developed by the Loan Syndications and Trading Association (LSTA), the Loan Market Association (LMA) and the Asia Pacific Loan Market Association (APLMA), have been providing guidance to the credit markets on the core components and criteria of the SLL product. In February 2023, both an updated SLLP and guidance document were released to

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