Portuguese law firm PLMJ is using climate clauses to decarbonise the equity finance sector.
By adapting Noah’s Clause for use in Commercial Paper Programmes (CPPs), borrowers could obtain financing at a lower cost, subject to compliance with specified sustainability requirements. The CPPs in question cover over €150 million of lending in total.
[Noah’s Clause] Green or Sustainability-Linked Lending Requirement requires each Lender to confirm that a percentage of its lending is sustainable or ‘green’ finance. PLMJ adapted this clause to apply the penalty to the borrower instead of the lender.
By using Noah’s Clause, PLMJ’s clients aligned the CPPs with their and their borrowers’ net zero targets. Using the clause ensures that the sustainability elements of the CPPs are meaningful and promote greater transparency within the banking sector.
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