AFII launches groundbreaking guide to Sustainability-Linked Bonds

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13 MAY 2024 – Stockholm, Sweden – The Anthropocene Fixed Income Institute (AFII), the research organisation empowering fixed income investors to drive the climate transition, has today published the ‘Sustainability-Linked Bond Handbook: A practitioner’s guide’, lead authored by AFII’s CEO and Founder, Ulf Erlandsson, and Managing Director, Head of Research, Josephine Richardson. This first-of-its-kind guide is intended to advance understanding of sustainability-linked bonds (SLBs) and help scale the market for these instruments.

Ulf Erlandsson explained the thinking behind the Handbook’s publication: “SLBs are a financial innovation with the potential to direct billions of dollars to the decarbonisation of the global economy. These bonds allow companies and countries to commit to and finance ambitious and holistic transition plans. However, as a new product, there have been some false starts and criticisms. Our goal is to equip market participants with the knowledge to identify and invest in ambitious SLBs that offer true financial and sustainability impact.”

With analyses from AFII’s team of seasoned market professionals, including former portfolio managers and traders, the SLB Handbook distils extensive, original research into a practical guide for fixed income practitioners. It includes over 40 detailed case studies, providing readers with a solid foundation of real-world applications and evidence-based outcomes.

Josephine Richardson added: “A central theme of the Handbook is the strategic use of pricing mechanisms to design ambitious SLBs. Instruments designed this way can attract a broad spectrum of investors while also encouraging issuers to set stretch targets that increase their sustainability impact. The Handbook also includes guidance on the various ways in which SLBs can be deployed in fixed income strategies, from pure alpha generation to sustainability risk hedging.”

The Anthropocene Fixed Income Institute is a philanthropically supported, non-profit organisation, producing practical research and portfolio management tools for fixed income investors and issuers. Justine Leigh-Bell, Executive Director, commented: “We are very proud of the publication of the SLB Handbook after three years’ of dedicated research that has convinced us of the value of this instrument. We hope the guide will become a go-to for the market, and plan to update it regularly with fresh examples and analyses, as the sector progresses.”

Several AFII analysts past and present have contributed to the Handbook’s contents, including Stephanie Mielnik, Kamesh Korangi, Cedric Rimaud, Johan Jarnmo, David Lewis and Hazel Ilango.

Editors’ notes:

Click here to view the Sustainability-Linked Bond Handbook. Digital and printed copies can be obtained by emailing us.