Guidance-on-Green-Loan-Princples-Feb-2023

The Green Loan Principles (GLP) were originally published in 2018 and provide a framework for what is recognized as an increasingly important area of finance. In order to promote the development of this product, and underpin its integrity, the APLMA, LMA, and LSTA considered it appropriate to produce Guidance on the GLP, to provide market practitioners with clarity on their application and promote a harmonized approach.

* On April 20, 2023, the following amendments were made: (1) Updated to include a disclaimer at the start of guidance. (2) First paragraph, Question 2.F. – Wording amended to align with GLP.  This now reads: “Furthermore, the borrower of a green loan should clearly communicate to its lenders the environmental sustainability objectives of the Green Projects, and borrowers are encouraged to position this information in the context of their overarching objectives, strategy, policy and/or processes relating to environmental sustainability.” (3) Second paragraph, Question 2.H. – Wording amended to align with GLP. (4) Question 2.H. – Final paragraph was removed as this was a duplication. (5) First paragraph, Question 3.A.III. – Wording amended to align with GLP. This now reads: “The GLP provide that borrowers should, where appropriate, clarify which investments or project portfolios may be refinanced and disclose, to the extent relevant, the expected look-back period (i.e., the number of previous years that the borrower will look back to) for refinanced eligible Green Projects.” (6) Question 3.B.I.(f) – Added the words “indicative only and” to align with GLP. (7) Question 3.B.II(a) – Typo corrected in the final sentence. (8) The first paragraph, Question 3.B.II(c) – Wording amended to align with GLP. This now reads: “The focus of green loans is on the eligible projects rather than on the borrower itself. It should nonetheless be noted that the GLP require that borrowers clearly communicate to its lenders the environmental sustainability objectives of the Green Projects, as well as complementary information on the processes by which the borrower identifies and manages perceived, actual or potential social and environmental risks associated with the proposed projects.” (9) Fourth paragraph, Question 3.C.I. – Wording amended to align with GLP. This now reads: “This documentation should be communicated to lenders participating in the loan on the basis agreed between the parties in the legal documentation.”  (10) Question 3.D.I. – Green Loan Coordinator – Hyperlink to ‘An Introduction to the Sustainability Coordinator Role’ included.

Our entire list of Sustainable Lending Library is available here.

Downloads
File
GLP-Guidance-2023_V12.pdf

Become a Member

Membership in the LSTA offers numerous benefits and opportunities. Chief among them is the opportunity to participate in the decision making process that ultimately establishes loan market standards, develops market practices, and influences the market’s direction.

View Current Members

Our Partners

CUSIPFitch Group logolseg_da_logo_hrz_rgb_posMorningstar
Total Results: 

Sort by:

The Kirschner Case: This is the End

The Supreme Court denied Kirschner's petition for certiorari, finally ending the case. As LSTA's Elliot Ganz explains, this cements that syndicated loans are not securities,…