- FCA says UK’s sustainability-linked loan (SLL) market has matured since 2023, with more relevant and ambitious sustainability targets and stronger governance.
- Banks increasingly willing to declassify poorly structured SLLs, raising overall market integrity.
- Scaling the market—especially for SMEs—remains difficult due to high reporting costs, assurance requirements, and large loan size thresholds.
The UK’s Financial Conduct Authority (FCA) says the sustainability-linked loan (SLL) market has taken “important steps in the development of a credible transition finance ecosystem” since its 2023 review, with better practices, more robust product structures, and stronger alignment between sustainability targets and borrowers’ business models.
