With a single KPI linked to emissions, the SLB sets incentives for a further reduction of emissions and provides investors with an opportunity to actively support related efforts. Its “stretch targets” incentivise and reward a strong decarbonisation performance beyond the base targets.
Our analysis suggests the targets are ambitious, requiring a considerably higher emissions reduction compared to the country’s historical trajectory. In this paper, we estimate Slovenia’s probability of achieving its Sustainability Performance Targets, and the implications for pricing compared to vanilla bonds.
