CASE STUDY: SECOND PARTY OPINIONS
Establishing Measurable Climate Targets in Sovereign Financing
With clearly defined sustainability performance metrics and independent third-party assessment, Slovenia's Sovereign Sustainability-Linked Bond Framework sets a precedent for other European nations, offering a model for integrating forward-looking climate goals into sovereign bond instruments.
Overview
In March 2025, Slovenia published its Sovereign Sustainability-Linked Bond Framework (SLBF), becoming the first European sovereign to issue a performance-based bond aligned with the ICMA 2024 Sustainability-Linked Bond Principles. The framework follows previous sovereign issuances of Sustainability and Social Bonds in 2021, 2023, and 2024, and represents a continuation of the government’s broader strategy to embed sustainability considerations into fiscal policy.
To emphasize its commitment to long-term climate goals, the Slovenian government was looking for an independent external assessment of the framework, to assess alignment with global sustainability standards.
The Challenge
Establishing Measurable Climate Targets in Sovereign Financing
Slovenia's sustainability strategy aims to develop its economy while aligning with the U.N. Sustainable Development Goals, focusing on decarbonization with a net-zero commitment by 2045, outlined in the recently adopted Climate Act.
Advancing its transition toward a climate-neutral and circular economy, Slovenia set the goal to align sovereign financing with an updated National Energy and Climate Plan (NECP 2024), the EU Green Deal, Paris Agreement, and Sustainable Development Goals.
The key challenge was in integrating sustainability targets into fiscal instruments in a way that is measurable, credible, and transparent.
The Solution
Slovenia defined three material Key Performance Indicators (KPIs) aligned with national priorities and established dual Sustainability Performance Targets (SPTs) for each KPI, as well as fallback provisions in the event of non-reporting.
To provide greater transparency for investors and affirm that its targets are not only ambitious, but also measurable and realistic, Slovenia sought an independent third-party assessment.
S&P Global Ratings was selected as the Second-Party Opinion (SPO) provider. S&P delivered a detailed assessment of the selected KPIs, data governance practices, and the framework’s alignment with Slovenia’s strategic climate goals and the best practices outlined in the ICMA Sustainability-Linked Bond Principles.
“S&P communicated their findings in a clear way, which helped us strengthen both the technical robustness and the transparency of the Framework. What stood out most, however, was the depth of expertise and long-term experience that S&P has in the field of green and sustainable finance. It was evident at every stage of the process and greatly contributed to the credibility of the evaluation.”
- Marjan Divjak, Director General, Ministry of Finance, Government of Slovenia
The Outcome
In June 2025, Slovenia successfully issued its inaugural 10-year sustainability-linked bond (SLB) under its new framework, raising €1 billion to support the country's environmental and climate objectives. The bond was oversubscribed (with final books in excess of €6.5 bn), attracting a diversified investor base from both within and beyond Europe, and benefiting from favorable pricing.
Aligned with international sustainability standards, this issuance contributes to the diversification of Slovenia’s debt instruments, broadens its investor base, and reinforces the government’s commitment to combating climate change.
With clearly defined KPIs, ambitious sustainability performance targets (SPTs), performance-based financial incentives, and an independent third-party assessment, the SLB sets a precedent for other European nations—offering a clear model for integrating forward-looking climate goals into sovereign bond instruments.
