The issuance of sustainability-linked loans (SLLs) has grown exponentially in recent years. Using a scoring methodology … effective incentives for improving corporate sustainability performance. We demonstrate that the majority of loans fails to meet … key requirements that would make them credible instruments for generating effective sustainability incentives. These …

likely to receive a bank loan, and their loans come with lower interest rates. These effects, however, are driven by banks … previously linked to a group of borrowers with low sustainability performance. These findings suggest that low ESG banks have a …