Sustainability-linked loans and bonds can effectively promote credible transitions by borrowers and issuers. Their main innovation lies in the way they tie the cost of capital with sustainability performance. As a new financial instrument, they face multiple challenges and risks. A few examples include the comparability, relevance and ambition of metrics, as well as the materiality of penalties and discounts in the cost of capital. This session will provide an overview of the challenges and opportunities arising in the sustainability-linked debt markets and how to build a robust framework for selecting key performance indicators while ensuring a credible corporate transition.