Who assess whether the borrowing company meets these targets?

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1. Given the information in the articles “More CFOs Add Sustainability Targets to Corporate Loans” and “Finance Chiefs Urge More Companies to Link Debt to Sustainability Goals”, how are sustainability-linked loans and bonds different from the more traditional loans and bonds? What kind of sustainability targets are the interest rates on these loans and bonds linked to? List at least two actual examples of such sustainability targets. Who defines these sustainability targets–the borrowing company or the lender/investors? Who assess whether the borrowing company meets these targets? What happens if a company does not meet the targets?
2. Based on the articles “More CFOs Add Sustainability Targets to Corporate Loans” and “Finance Chiefs Urge More Companies to Link Debt to Sustainability Goals”, it appears that the loans and bonds tied to some ESG (environmental, social, and governance) goals are becoming more commonplace. That means that companies are increasingly relying on these debt instruments as a source of financing and it also means that the banks are increasingly willing to write (lend) such loans and the bond investors are increasingly willing to invest in such bonds. Why do you think that is the case? What are the attraction for the borrowing companies. What are the attraction to investors / lenders?
3. The sustainability linked-debt is but one example of a relatively recent push by some shareholders and other corporate stakeholders to make companies more transparent about their impact on environment, society, local community, employee well-being and other sustainability matters. Do you find this development positive? What potential benefits do you see coming from this push? Do you envision any potential drawbacks and if so, what would they be?
References:
https://www.wsj.com/amp/articles/more-cfos-add-sustainability-targets-to-corporate-loans-11632130202
https://www.wsj.com/amp/articles/finance-chiefs-urge-more-companies-to-link-debt-to-sustainability-goals-11632517655

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