Sustainable Finance

Green Loan Frameworks

What is Green Loan Framework Development?

To issue green loans or sustainable-linked financial transactions aligned with the Loan Market Association’s criteria, you need to draft a comprehensive Green Loan Framework (GLF) that defines your policies and governance relating to the following principles:

  1. Use of proceeds
  2. Process for project evaluation and selection
  3. Management of proceeds
  4. Reporting

Based on this GLF, appropriate green loans can be tracked and identified to maximise benefits incurred through financial incentives.

Why develop a Green Loan Framework?

A GLF is a necessary step in issuing green loans. Without delineating the policies that govern a green loan, agreed upon by a borrower and lender, a firm cannot comply with the Loan Market Association’s Green Loan Criteria and thus cannot issue green loans.

In practice, GLFs are in effect a single document that is updated each year and allows for green loans to be pursued. With a GLF document in place, you can pursue green loans and achieve a discount on the interest rate.

How can Longevity Partners help you?

  1. Longevity drafts a comprehensive Green Loan Framework, defining your policies and governance in relation to your use of proceeds, process for project evaluation and selection, management of proceeds, and reporting.
  2. Following the drafting of a GLF and a process of assurance, Longevity Partners then tracks green loan opportunities across your financial transactions and applies the GLF to take advantage of the financial incentives present when issuing green loans.
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Green Loan Frameworks

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