Green and sustainability loans are the hot new trend in sustainable finance. Could they outgrow the booming green bond market, ask Nick Roumpis and Peter Cripps.
The green loan market passed a significant milestone in its evolution in March, with the launch of the Green Loan Principles (GLPs).
These are closely modelled on the Green Bond Principles (GBPs), which were launched in 2014, and helped secure a sustained period of rapid growth for the market.
Just like the GBPs, the GLPs are designed for lending with a dedicated green use of proceeds, and they recommend transparency about how the projects were selected, the funds allocated and the impacts reported.