Insights
Clear definitions of the sustainability, climate, and ESG terms that matter most — from CBAM and CSRD to SBTi and PCAF. Written by Semtrio's advisory team.
Sustainability governance is the system of structures, roles and processes through which an organisation oversees, decides on and is held accountable for its sustainability strategy and performance.
A Sustainability Performance Target (SPT) is the measurable, time-bound goal that an issuer or borrower commits to in a sustainability-linked bond or loan, against which the instrument's financial terms adjust.
A sustainability risk is an environmental, social or governance event or condition that, if it occurs, could cause an actual or potential material negative impact on the value of an investment — the "outside-in" risk that ESG factors pose to financial returns.
A sustainability-linked bond (SLB) is a bond whose financial characteristics — typically its coupon — change if the issuer meets or misses predefined sustainability performance targets, issued under ICMA's Sustainability-Linked Bond Principles.
A sustainability-linked loan (SLL) is a loan whose interest margin adjusts according to whether the borrower meets agreed sustainability performance targets, structured under the LMA's Sustainability-Linked Loan Principles.
SFDR is the EU regulation requiring financial market participants and advisers to disclose how they integrate sustainability risks into investment decisions and how their products account for adverse sustainability impacts.
If you're working through a regulatory framework or sustainability challenge and need clarity on a specific term or concept — our team is here to help directly.
