Sustainable Bond

Sustainable bonds are bonds that are issued to finance a combination of environmental and social projects in accordance with certain principles established by ICMA. In this context, "sustainability" means a focus on a stable future for the individual, as opposed to projects aimed at bringing benefits "here and now".

In particular, global warming, economic consumption of fossil resources and urban pollution can be included in the challenges to be dealt with through these bonds. These are issues that do not worry mankind today, but may become a serious problem in the future.

A distinction should be made between sustainable bonds and sustainability-linked bonds, which are issued within the framework of the relevant principles established by ICMA and are aimed at further developing the key role that debt markets can play in financing and rewarding companies that contribute to sustainability (in terms of environmental and/or social factors as well as factors related to the quality of corporate governance). Sustainability-linked bonds are intended to encourage the issuer to achieve significant, quantified, pre-determined, ambitious, regularly monitored and verified environmental and/or social and/or corporate governance quality objectives by means of key performance indicators and sustainability performance targets.

The proceeds from the placement of sustainability-linked bonds are intended for general purposes, so the targeted use of funds is not a determining factor in classifying a financial instrument as a sustainability-linked bond, as opposed to social or sustainable bonds, which are necessarily socially targeted.