{"id":21357,"date":"2025-05-13T14:00:37","date_gmt":"2025-05-13T07:00:37","guid":{"rendered":"https:\/\/fpt-is.com\/en\/?post_type=goc_nhin_so&p=21357"},"modified":"2026-01-20T10:21:10","modified_gmt":"2026-01-20T03:21:10","slug":"a-5-step-guide-to-sustainability-linked-loans-insights-from-the-enel-group-success-story","status":"publish","type":"goc_nhin_so","link":"https:\/\/fpt-is.com\/en\/insights\/a-5-step-guide-to-sustainability-linked-loans-insights-from-the-enel-group-success-story\/","title":{"rendered":"A 5-Step Guide to Sustainability-Linked Loans: Insights from the Enel Group Success Story"},"content":{"rendered":"

Sustainability-linked loans (Sustainability-linked loans \u2013 SLL) are becoming an important financial tool to help businesses link ESG strategies with preferential loan conditions. Unlike the traditional green lending system, SLL does not limit the target of capital use but focuses on measuring ESG performance through committed KPIs and SPTs.<\/span><\/p>\n

To achieve success, businesses need to adhere to the principles of the Sustainability-Linked Lending Principles (SLLP) and ensure transparent measurement, reporting, and verification processes to avoid the risk of \u201cgreenwashing\u201d. <\/span>
\nThis article will present the next 5 steps to approach a Sustainable Results-linked lending account, based on the latest benchmarks.Note: The content uses many specialized financial and ESG terms.<\/em><\/span><\/p>\n

Terminology explained<\/span><\/h2>\n

To help businesses easily follow the content, below is a summary table of the technical specialties used in the article. Concepts are explained in a concise way according to financial and international ESG standards.<\/span><\/p>\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Terminology<\/strong><\/span><\/td>\nExplain<\/strong><\/span><\/td>\n<\/tr>\n
Sustainability Linked Loan (SLL)<\/strong><\/span><\/td>\nSustainability-linked loans: loans where financial terms (e.g. interest rates) vary based on the company achieving specific ESG goals. There is no limit to the use of funds.<\/span><\/td>\n<\/tr>\n
Use of borrowed money<\/strong><\/span><\/td>\nTargeted use loan: requires funds to be used only for specified green or social projects.<\/span><\/td>\n<\/tr>\n
Environmental, Social and Governance (ESG)<\/strong><\/span><\/td>\nEnvironmental (Environmental), Social (Social) and Corporate Governance (Governance) factors \u2013 a trio of criteria to assess the level of corporate sustainability.<\/span><\/td>\n<\/tr>\n
Key Performance Indicators (KPIs)<\/strong><\/span><\/td>\nKey performance indicators: number of tools that can be selected to measure a company’s ESG performance.<\/span><\/td>\n<\/tr>\n
Sustainable Performance Targets (SPTs)<\/strong><\/span><\/td>\nSustainable performance target: Specific ESG target that the business commits to achieve over the loan term.<\/span><\/td>\n<\/tr>\n
Sustainability-Linked Lending Principles (SLLP)<\/strong><\/span><\/td>\nThe Solid Linked Lending Principles issued by LMA, APLMA and LSTA guide the design and operation of international standard SLLs.<\/span><\/td>\n<\/tr>\n
SLLP Guide<\/strong><\/span><\/td>\nDetailed guide on how to apply SLLP to real account borrowing.<\/span><\/td>\n<\/tr>\n
Sustainable margin adjustment<\/strong><\/span><\/td>\nThe interest rate adjustment mechanism is based on whether the enterprise achieves or fails to achieve the committed SPT.<\/span><\/td>\n<\/tr>\n
External verification<\/strong><\/span><\/td>\nIndependent Verification: a third-party audit to confirm that the business achieves its KPIs\/SPTs as reported.<\/span><\/td>\n<\/tr>\n
Greenwashing<\/strong><\/span><\/td>\nGreenwashing: Businesses exaggerate or misrepresent their environmental performance to gain financial advantage.<\/span><\/td>\n<\/tr>\n
Declassified event<\/strong><\/span><\/td>\nDeclassification event: account creation event that is no longer considered a sustainable link, often fails to achieve KPI\/SPT or violates reporting.<\/span><\/td>\n<\/tr>\n
Sustainability Compliance Certificate<\/strong><\/span><\/td>\nSolid Compliance Certification: Corporate assets are continuously deposited in the bank to report progress towards achieving KPI\/SPT.<\/span><\/td>\n<\/tr>\n
Verification report<\/strong><\/span><\/td>\nESG Determination Report: Third-party ESG independent report assessing the company’s performance on SPT.<\/span><\/td>\n<\/tr>\n
Sustainability Report<\/strong><\/span><\/td>\nSustainability report: a publicly available (or internal) document summarizing a company’s ESG performance.<\/span><\/td>\n<\/tr>\n
Conversion plan<\/strong><\/span><\/td>\nTransformation plan: a business plan to achieve carbon neutrality or long-term ESG goals.<\/span><\/td>\n<\/tr>\n
Terms of appointment<\/strong><\/span><\/td>\nRe-judgment clause: a clause that allows KPI\/SPT to be updated during the loan term if there is a major change in business operations or regulations.<\/span><\/td>\n<\/tr>\n
Second Party Opinion (SPO)<\/strong><\/span><\/td>\nSecond-party assessment: independent pre-contract assessment of KPI and SPT compliance with established standards.<\/span><\/td>\n<\/tr>\n
Limited Warranty<\/strong><\/span><\/td>\nValidation limit: defined by a lower confidence level for completeness testing but still ensuring customer integrity.<\/span><\/td>\n<\/tr>\n
Reasonable assurance<\/strong><\/span><\/td>\nReasonable form of verification: Higher assurance, compatibility testing, requires more thorough technical testing process.<\/span><\/td>\n<\/tr>\n
Loan Market Association (LMA)<\/strong><\/span><\/td>\nLoan Market Association \u2013 an international organization that sets standards for capital-efficient loan markets.<\/span><\/td>\n<\/tr>\n
Asia Pacific Loan Market Association (APLMA)<\/strong><\/span><\/td>\nAsia Pacific Loan Market Association.<\/span><\/td>\n<\/tr>\n
Lending and Trading Association (LSTA)<\/strong><\/span><\/td>\nAmerican Loan Syndication and Transaction Association.<\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

To continue to have a solid loan account, businesses need to first build a solid ESG foundation. Determining the right weight indicators (KPIs) in line with the business strategy will be the first and most important step, serving as the basis for the entire process of Judging and operating the loan.<\/span><\/p>\n

\"A<\/a>05 Steps to Effectively Approach and Connect with Businesses<\/strong><\/span><\/p>\n

1. Build an ESG strategy and identify key KPIs<\/span><\/h2>\n

1.1. Internal Assessment: Determine the sustainability of the standard in relation to the overall business strategy<\/span><\/h3>\n

Before negotiating a sustainability-linked loan (SLL), businesses should conduct an internal assessment to identify strategic sustainability objectives that align with their long-term business plans. <\/span>
\nAs guided by the Guidance on Sustainability-Linked Loan Terms (LMA, 2024), businesses should:<\/span><\/p>\n