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Key definition
Sustainability definition

What does Sustainability mean? In legal practice, sustainability describes integrating environmental, social and economic considerations into planning, procurement and construction so that buildings and infrastructure are healthy, comfortable and affordable, use durable and renewable resources, and minimise environmental impact over their whole life. It is not a single statutory definition; rather a cross‑cutting concept often expressed as “sustainable development”. In England (planning law under the Planning and Compulsory Purchase Act 2004 and the NPPF), Scotland (NPF4 and planning legislation), Northern Ireland (Planning Act (NI) 2011 and the SPPS) and Ireland (Planning and Development Act 2000), it guides plan‑making and planning permission, environmental impact assessment and...

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Sustainability-Linked Bonds: ICMA Sustainability-Linked Bond Principles, KPI/SPT Calibration, Bond Features, Reporting and Verification, plus European Regulatory and Market Developments

Practice notes
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What does this Practice Note cover?

This Practice Note explains what a sustainability-linked bond (SLB) is, outlines the Sustainability-linked Bond Principles (SLBPs) issued by the International Capital Market Association (ICMA), and how they operate. It also explores the outlook for SLBs. For the latest updates and major developments in sustainable finance (including SLBs), see Practice Notes: Sustainable finance—recent news and Sustainable finance and ESG—timeline. For an introductory overview of sustainable finance, see Practice Note: Introductory guide to sustainable finance and ESG for finance lawyers.

What are sustainability-linked bonds?

SLBs are bonds where the proceeds are not earmarked for green or sustainable projects (unlike ‘use of proceeds’ green or sustainability bonds) and are intended for general corporate purposes. Instead, SLBs are tied to performance against specified key performance indicators (the KPIs) aimed at meeting pre-defined sustainability performance targets (SPTs). Depending on whether those targets are met, certain bond terms may change (for example, a coupon ratchet). In doing so, issuers make an explicit commitment to deliver improved sustainability outcomes within a set timeframe. SLBs are forward-looking, performance-based instruments. They are designed to complement green bonds and should enable more issuers to access the...

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Jacqueline Heng
Jacqueline Heng

Jacqueline Heng is a capital markets lawyer based in London, who is qualified in England, New York and Ireland.Jacqueline is recognised as a Next Generation Partner for Debt Capital Markets by Legal 500, and a “Notable Practitioner” in the IFLR 1000 Rankings. She has also been awarded 'Rising Star for Capital Markets' and 'Rising Star UK' at the inaugural Euromoney LMG Awards.Jacqueline advises on Regulation S offerings outside of the United States, as well as Rule 144A offerings into the United States, and on both publicly listed and privately placed deals.For over a decade, she has advised investment banks, DFIs, sovereign and quasi-sovereign issuers and corporate clients across a broad spectrum of industries including financial services, energy, manufacturing, mining and natural resources, transport and TMT.Jacqueline has worked on various debt securities offerings (including corporate bonds, green bonds, sovereign bonds,...

Web page updated on 27/05/2026

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