Sustainability-linked loans are not (yet) where they need to be
Recent financing granted to mining companies raise questions around the KPIs used in sustainability-linked loans.
Sustainability-linked loans, which offer interest rate discounts when companies meet certain KPIs, are gaining popularity – but the immaturity of the market, combined with little oversight from regulators, means they sometimes lack ambition.
At the end of September, Spanish bank BBVA arranged a US$200 million club deal facility linked with sustainability key performance indicators (KPIs) for Peruvian mining company Hochschild, through its subsidiaries Ares and Amarillo Mineraçao do Brasil.
