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ARTICLE · 04 MAY 2023

Capital Markets Insight: Sustainability-linked Bonds

Mayer Brown
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In this briefing, we take a look at sustainability-linked bonds ("SLBs"), which have fast become an important feature of the sustainable finance market.

United KingdomFinance and Banking
Peter Pears
Peter Pears
James Taylor
James Taylor
Robert Flanigan
Robert Flanigan
Bernd Bohr
Bernd Bohr
Whitney Joseph
Whitney Joseph
Serena Mussoni
Serena Mussoni
Lola Adekoya
Lola Adekoya
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Sustainability-Linked Bonds: Some practical considerations for documenting and structuring transactions

In this briefing, we take a look at sustainability-linked bonds ("SLBs"), which have fast become an important feature of the sustainable finance market. According to Climate Bonds Initiative, SLB issuance reached US$76.3 billion in 2022 and we have seen an increasingly wide variety of corporate and sovereign issuers take advantage of the structure.

However, the market has not grown without incident or controversy. Some issuances have attracted accusations of "greenwashing" for a lack of ambition in their targets, the lack of meaningful consequences if a target is not met or where the structure of the SLB does not address the true sustainability challenges of an issuer's business. SLBs carry with them some particular considerations that should be kept in mind when structuring a transaction and preparing the relevant legal documents and marketing materials.

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This Mayer Brown article provides information and comments on legal issues and developments of interest. The foregoing is not a comprehensive treatment of the subject matter covered and is not intended to provide legal advice. Readers should seek specific legal advice before taking any action with respect to the matters discussed herein.

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