What is sustainable debt?

Sustainable debt refers to financing instruments such as green bonds, social bonds and sustainability‑linked bonds or loans that fund projects with environmental or social benefits or tie the cost of capital to a borrower’s sustainability performance.

What’s the difference between green bonds and sustainability‑linked bonds?

Green bonds earmark proceeds for specific environmental projects; sustainability‑linked bonds allow general corporate use but include performance targets that adjust the coupon or margin depending on whether sustainability KPIs are achieved.

What should issuers consider when structuring sustainable debt?

Issuers should align use‑of‑proceeds or KPIs with recognized frameworks, set credible and ambitious targets, establish strong governance and reporting systems, and engage investors early to understand pricing and disclosure expectations.

What are the risks involved?

Key risks include accusations of greenwashing if claims are unsubstantiated, penalties for missing performance targets, additional reporting burden and potential regulatory scrutiny. Transparent disclosures and credible targets help mitigate these risks.

Volume 15: Understanding EcoVadis Methodology Changes in 2026

The Sheet, Volume 15

Understanding EcoVadis Methodology Changes in 2026

Why EcoVadis medals dropped in 2025 and 2026 even where scores held steady — and how to respond.

The Sheet Volume 15

Understanding EcoVadis Methodology Changes in 2026

If your company’s EcoVadis medal dropped in 2025 or 2026 despite stable or improving scores, you’re not alone. Fundamental methodology changes at EcoVadis have affected companies across every industry and geography. This brief explains what changed, why it matters, and how to respond.

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