Approach to build a social loan framework based on LMA principles

1. Approach followed to build a Social loan framework as per
LMA, APLMA , LSTA Social Loan Principles 2021

2. Step by step process as Advisor to a client
Initiating discussion with client
>Understand the client’s requirement for a
social loan
>Explore the client's existing framework
>Geography for investment
>Explaining requirements of LMA/LSTA
>Research on client’s existing ESG strategies,
Materiality undertaken
>Explain Client how social financing criteria
vary across geography and not having criteria
according to best practices in the market may
create social washing concerns and lack of
interest from investor
Test and refine
o>Build a list of activities and eligibility criteria
following GLP and internal Advisor team
taxonomy that can fit the Client’s social
financing plans
o>Set up bi-weekly calls with the client’s
internal team (consisting of Sustainability,
Finance, Treasury, and Management)
o>Refine the list to key activities and allied
eligibility criteria
o>Upskilling treasury and Client team if
required
o>Finalise an Initial draft of the Green Loan
framework (based on LMA principles)
o>Get buy-in from the Client’s board to
finalise
Finalise
>Finalise the Framework
• Finalise UOP
• Finalise a process to evaluate and select
projects (based on the client’s existing
process)
• Establishing a method for the client to
Manage Proceeds
• Development of impact and allocation
Reporting requirements (based on clients’
existing practice and LMA requirements)
>Assist client to receive SPO
1-2 Months 1-3 months 3 + months

3. Set up required at Advisor end to facilitate smooth
delivery of such projects
Internal
research
Detailed structured
taxonomy (informed by
market best practice and
standards)
Dedicated
team for a
project
As such projects are very
nuanced, therefore a
dedicated team is a must
for satisfactory delivery of
a framework
Working
with SPO
providers
Staying up to date on new
best practices in the market
is key to help client not go
through multiple changes in
Framework post finalisation