Sustainability-linked bonds are a new type of debt instrument in the ESG investing scene.
The bonds’ features can vary depending on whether the issuer achieves its predefined sustainability objectives. The proceeds deriving from sustainability-linked bonds are not restricted to specific projects and may be used for general corporate purposes. Sustainability-linked bonds complement the range of sustainable debt instruments, such as green and social bonds, but might also become an attractive alternative to standard corporate bonds. The Luxembourg Green Exchange (LGX), the world’s leading platform for sustainable finance instruments, recently recognized sustainability-linked bonds.
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