Sustainability KPIs in finance transactions
Sustainability-linked financings are an integral part of today’s financing landscape. There is a wealth of data and information available, particularly on the Key Performance Indicators (KPIs) of sustainability-linked financings, but it is scattered.
In this guide we have compiled, analysed and commented on all aspects of sustainability-linked financings to give you access to everything you need to know.
As more and more borrowers, issuers and investors adopt a sustainable finance approach, Sustainability-Linked Loans (SLLs) and Sustainability-Linked Bonds (SLBs) are expected to grow, as a natural complement to Green and Social loans/bonds.
Top 5 components of sustainability-linked financings
Industry standards and relevant publications
In-depth analysis of KPIs – best practice in sustainability-linked financings
CMS conducted an in-depth study of more than 200 SLBs issued on the “public” (Eurobonds and Euro Medium Term Notes) and “private” bond markets in Europe and Japan between January 2020 and December 2024. These SLBs included nearly 400 KPIs, which we classified into the following categories:
- Green
- Social (or a combination of Green and Social)
- Other.
Details of each category are given below.
CMS study of the KPIs used in SLBs – December 2024
* Expressed as a percentage of the relevant type of KPI in the total number of KPIs in the study.
Our analysis shows that Green KPIs (whether alone or combined with Social KPIs) are predominantly used, well ahead of Social KPIs (used alone) and Other KPIs.
Our analysis also looked at the number of KPIs used for each SLB.
* Expressed as a percentage of the number of KPIs per the total number of SLBs included in our study, showing the proportion of SLBs that feature either one, two, three or four KPIs.
Almost half of the SLBs in our study include two KPIs; one third of the SLBs in our study include only one KPI; and 17% of the SLBs in our study include three KPIs. Very few SLBs (2%) include four KPIs.
CMS study of KPIs used in SLLs – December 2024
We conducted a separate study of SLLs over the same period. The majority of SLL borrowers also use Green KPIs (especially the reduction of greenhouse gas (GHG) emissions).
Our study details the KPIs used by issuers within each KPI category: select a category below to find out more about our in-depth analysis.
