Fundamentals · 6 min read
What Are KPIs and SPTs in Sustainability-Linked Loans?
KPIs and SPTs are the heart of every SLL. Getting them right determines whether the loan is credible.
KPIs: what is measured
KPIs should be relevant, core and material to the borrower's business, measurable on a consistent methodological basis, and benchmarkable where possible.
- Scope 1 and 2 GHG emissions
- Energy intensity
- Share of renewable electricity
- Water consumption
- Lost-time injury frequency rate
SPTs: the target level
SPTs set the level each KPI must reach by a specific date. They should be ambitious, go beyond business as usual and be consistent with the borrower's overall sustainability strategy.
Baselines and methodology
A clear baseline and documented calculation method are essential. Changes in methodology or scope need to be handled transparently.