The New Clause Library Which Will Bring Standardisation To Sustainability-linked Derivatives

In April 2022, the International Swaps and Derivatives Association, Inc. (ISDA) conducted a survey of market participants on the current forms and use of sustainability-linked derivatives (SLDs) by them (the ISDA SLD Survey). The results of the ISDA SLD Survey highlighted strong member interest for standardised documentation to allow market participants to document SLDs. Following the ISDA SLD Survey, on 17 January 2024, ISDA published the ISDA SLD Clause Library, which is a framework of standardised definitions and provisions to provide market participants with the flexibility to document bespoke SLDs using standardised components. The launch of the ISDA SLD Clause Library is an important step towards a liquid SLD market and represents an important milestone in the development of standard OTC derivatives documentation for SLDs. This briefing provides an overview of the recently published ISDA SLD Clause Library.