Sustainability Linked Loans (SLL) are an innovative Environmental, Social and/or Governance (ESG) themed debt financing mechanism that enable borrowers to demonstrate to their lenders their commitment to long-term sustainability objectives.
AGL first energy company to issue SLL in Asia Pacific region
On Wednesday 11 September 2019, AGL closed its first SLL, becoming only the fourth company in Australia to issue an SLL and the first energy company to issue one in the Asia Pacific region.
In AGL’s SLL there are two KPI metrics – one relating to emissions intensity and the other to renewable energy and storage capacity.
Issuing an SLL demonstrates AGL’s commitment, as one of Australia's leading integrated energy companies, to managing the risks that the long-term transition of the energy sector away from high carbon emissions places on AGL’s lenders, investors and the economy at large.
AGL’s SLL incentivises efficiency and gradual improvement in AGL’s emissions performance, recognising the scale and complexity of transitioning AGL’s operations given AGL’s important role in managing the stability of Australia’s electricity grid.