Sustainability-linked loans

Sustainability-linked loans incentivise companies’ sustainability performance by linking the interest margin to the improvement of the companies’ ESG score or to the improvement on tailored sustainability KPIs. Since the launch of our first loan to Philips in April 2017, we have provided sustainability-linked loans to a number of other companies across various sectors and regions. These loans can be used for general corporate purposes. Read more about the success of sustainability-linked loans.

Advice

To you as our client, we provide a number of advisory services. We can advise you on the benefits of an environmental, social and governance (ESG) rating, and which rating is the most appropriate for your company. We can advise you on transitioning towards becoming more sustainable and how to work towards improving your ESG rating. Since an ESG rating is a key parameter for your stakeholders and is internationally recognised, it can be an important tool in many areas beyond the financial benefits included in the loan. We are committed to playing a major role in supporting sustainable development, socially-responsible behaviour and policies through financing. Sustainability-linked loans were created specifically for the purpose of helping our clients improve their sustainability and ESG rating.

KPIs

In addition to an ESG rating-linked sustainability improvement loan, your company can also choose to link its margin to specific sustainability-related performance indicators. In close dialogue with you, we will formulate three to five quantitative KPIs and agree on future targets to be achieved during the lifetime of the loan.

To be effective, we believe the sustainability targets linked to financing must be ambitious, industry-wide, based on best efforts, and wherever possible verified by a reputable, independent party. This will protect the credibility of the market and make sure companies tackle the most difficult and urgent issues first. If the ambition levels are too low, sustainability-linked products will not have the impact they’re designed for.

Shared responsibility

We believe sustainability is not something you do alone. Everyone has to be on board to make sure the sustainability-linked finance market is directed towards creating the big impact for which this product is designed. As founding father of the sustainability-linked loans, ING has published a paper outlining our stance on sustainability-linked finance. Read here why we feel so strongly about protecting the integrity of this fast-growing market.

We believe in sustainability

We approach every financing opportunity through a ‘sustainable lens’ – almost all projects can have a sustainability component, whether that entails implementing more alternative energy sources, recycling waste or developing green buildings and/or infrastructure. We also believe sustainability practices have evolved from being predominantly cost-cutting projects to tangible, revenue-driving strategies.

Our own operations have been climate-neutral for over a decade, and we are happy to partner with you so that you can achieve your own similar goals.