Principles

The SSDH is very proud to announce the publication of the Voluntary Principles for the Deployment of Credit Enhancements to Support Sustainability-Linked Financing for Nature and Climate. The Principles reflect a year of discussion by the Task Force, and identify four elements that are key to improving the access and affordability of credit enhancement instruments, making transactions more effective and efficient:
 

1. Suitability: Credit enhancements to support sustainability-linked financing for nature and climate should be suited to the country’s macroeconomic and financial circumstances

2. Nature and/or climate impact: The credit-enhanced transaction should involve ambitious commitments from the country’s national climate and nature plans that are aligned with the goals of the Paris Agreement and/or the Kunming-Montreal Global Biodiversity Framework, with relevant and material key performance indicators and coherence between capital mobilization and policy efforts.

3. Governance structure: Credit-enhanced transaction structures should adhere to best practices and standards on use of resources and provide robust reporting and verification.

4. Accountability and effectiveness: Credit enhancements are valuable, scarce resources and the credit-enhanced transaction should ensure their efficient and transparent use, promoting accountability, transparency and replicability of the transaction.

 
The Principles present a concrete step towards creating a shared understanding and developing shared practices in the use of credit enhancements form sustainability-linked financing. The Task Force has proven a valuable venue for the exchange of knowledge and expertise between participating members, and will continue to work on a consistent and harmonised approach to developing impactful credit enhancement solutions.
Download the Principles