[Editor's note: A version of this story appears in the October 2021 issue of Oil and Gas Investor magazine.]

As appetite for energy investments has shifted dramatically in the past decade, energy companies have repeatedly transformed their investor-outreach strategy in response. ESG-focused investing and the advent of sustainable financing frameworks have generated interest.

Although sustainability-linked bonds (SLBs) may not fundamentally change the risk of investing in the energy industry, they are worth exploring as a way for companies to attract new investment capital, achieving measurable ESG-related goals and allowing some institutional investors to satisfy their own ESG mandates.

But while this dynamic may drive marketing, securing value from SLBs requires nuanced discussion of an issuer’s strategic ESG-related goals, how to realistically achieve them on a discrete time frame and how to avoid claims of “greenwashing.”

Calibrating appropriate key performance indicators (KPIs) and sustainability performance targets (SPTs) is key to success and require collaboration among the issuer, its advisors and second party opinion (SPO) providers.

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