Green finance instruments are expected to report that funds have been used for eligible projects, usually with verification by an independent party. In sustainability-linked loans, the interest rate can be linked to meeting set KPI targets.
Related terms
Lease certificate (sukuk)A capital market instrument issued by asset leasing companies to finance specific assets or rights, whose return is paid to investors as rent or profit share.Key performance indicator (KPI)A numerical indicator used to measure the extent to which an organisation is achieving its strategic objectives.Debt instrumentBonds, bills and similar capital market instruments through which the issuer undertakes to pay investors principal and interest at a set maturity.Carbon Border Adjustment Mechanism (CBAM)An EU regulation that puts a price on the embedded carbon emissions in the production of certain goods imported into the European Union.Carbon footprintThe total greenhouse gas emissions caused by an organisation, product or activity, expressed in carbon dioxide equivalent (tCO₂e).Climate-related risksThe potential effects on a company's financial position of physical risks arising from climate change and transition risks arising from the shift to a low-carbon economy.
Last updated: October 22, 2026 · This definition is for general information only.