Introduction
Current state of green, social, sustainable and sustainability-linked loans in 2023/24
- Corporate and institutional issuance/loans update.
- Emerging trends in loan transactions.
- Sustainable Finance challenges and opportunities in 2023/24.
Green loans
Green Financing Framework due diligence
Case study 1: Analysing a significant corporate green finance programme/framework.
- How to assess the coherence of a corporate framework.
- Mapping corporate strategy and SDGs commitment.
- Adherence to best market practice.
- Mapping to LMA Green Loan Principles/other standards.
- Creating a due diligence checklist.
- Classification of risks.
- Identifying ESG exclusions for project eligibility.
- Using publicly available information: Second Party Opinion/Verification reports + others
- LMA/ICMA recommendations.
- SPO reports, providers, independence and value add.
- Verification reports, providers, independence and value add.
- Other sources of information: industry bodies/think-tanks.
- Examine eligibility criteria for green projects and what questions to ask.
- Use of Proceeds
- Project Evaluation
- Project selection
- Deployment
- What extra information do you need as a lender?
- Borrower competency
- Borrower infrastructure (people, systems, data)
Green and social loan monitoring and reporting
- Best practice for green and social loan monitoring and reporting
- Tracking and assessing Use of Proceeds within the borrower
- Account segregation
- Borrower governance
- Reporting periods
- Individual project/portfolio project choices
- Borrowers and confidentiality
- How to assess impact.
- Best practice – using the ICMA Frameworks for Green + Social finance.
- Sector-specific guidance
- Core Indicators
- Other indicators
- Mapping to SDGs – one approach
Social loans
Delegates will explore the current challenges in classifying social projects and measuring their impact.
Case study 2: analysing a bank social finance programme/framework.
- Assessing the coherence of a social finance framework (SDGs and strategy).
- Mapping corporate strategy and SDGs commitment
- Adherence to best market practice
- Mapping to LMA Social Loan Principles/draft Taxonomies
- Creating a due diligence checklist.
- Classification of risks
- Project eligibility
- Using publicly available information within Second Party Opinion/Verification reports.
- LMA/ICMA recommendations for Social finance
- SPO examples
- Examine eligibility criteria for social projects and what questions to ask.
- Use of Proceeds
- Project Evaluation
- Project selection
- Deployment
Social impact reporting
- Social impact.
- Impact reporting for social projects – using the ICMA Framework.
-Outputs
-Outcomes
-Impact
-Impact confirmation on target population
Sustainable loans
- Understanding the importance of a ‘Just Transition’
- Combining Green and Social loan due diligence
-Assessing the interplay between the two components
Sustainability-linked loans
Case study 3: analysing a Sustainability-linked corporate framework.
- How to assess the coherence of a sustainability-linked finance framework.
- Mapping corporate strategy and SDGs commitment
- Adherence to best market practice
- Mapping to LMA Sustainability-Linked Loan Principles
- Determining the borrower’s ambition
- Understanding the mechanics and choices of KPIs and SPTs
- Common primary and secondary KPIs
- Materiality
- Strategic significance
- Measurability
- Benchmarking
- SPT disclosure
- Using publicly available information within Second Party Opinion/Verification reports.
- SPO examples
- LMA/ICMA recommendations for Sustainability-Linked Loans/Bonds
Wrap up / Q and A