EPISODE · May 2, 2023 · 54 MIN
Innovations in Sustainable Finance #4 Stéphanie Mielnik | Sustainability-Linked Bonds
from Innovations in Sustainable Finance · host Julian Kölbel
In this episode, Stephanie and I delve into sustainability-linked bonds (SLBs) to explore their potential benefits and risks. SLBs have grown to a USD 280 billion market and represent an exciting alternative to green bonds in the sustainable debt market. When issuing an SLB, companies pledge to reach a sustainability performance target as part of the contract. If the company does not reach the target, the bond investors receive an additional “step-up” coupon. We analyze the example of a recent Air France KLM issue. One of Stephanie’s key points is that market pricing should reveal which SLBs have ambitious targets. Here are a few links if you want to follow up on some of the points we cover.Anthropocene Fixed Income Institute Research on SLBsSecond party opinion on Air France-KLM SLB
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Innovations in Sustainable Finance #4 Stéphanie Mielnik | Sustainability-Linked Bonds
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