Unlike a green loan, the use of proceeds is not restricted; what matters is that targets are ambitious and measurable. Independent verification of the performance indicators is usually a condition in the loan agreement.
Source: LMA Sürdürülebilirlik Bağlantılı Kredi İlkeleri
Related terms
Green financeInstruments such as green bonds, green loans and sustainability-linked loans used to finance projects with environmental benefits.Key performance indicator (KPI)A numerical indicator used to measure the extent to which an organisation is achieving its strategic objectives.Sustainability assuranceAn independent practitioner providing assurance on whether the information in a sustainability report has been prepared in accordance with the relevant reporting standards.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 creditA tradable certificate representing one tonne of carbon dioxide equivalent of greenhouse gas reduction or removal achieved by a verified project.Carbon footprintThe total greenhouse gas emissions caused by an organisation, product or activity, expressed in carbon dioxide equivalent (tCO₂e).
Last updated: November 8, 2026 · This definition is for general information only.