FINANCING ESG-RELATED INVESTMENTS
Across the market, the role of lenders in shaping corporate behaviour is well-recognised, with sustainability- and ESG-linked lending continuing to grow year on year. In 2019, the total cumulative issuance of sustainable debt was measured at US$1.17 trillion; sustainability-linked loans (loan facilities with ESG performance linked pricing) totalled US$122 billion, an increase of 168% since the previous year; and green bond issuances totalled US$271 billion.
Increasingly, regulators and trade bodies are also focusing on the role of finance in driving better environmental and social outcomes, both with formal reporting and disclosure frameworks and voluntary standards such as the Green Loan Principles and the Sustainability-Linked Loan Principles, published jointly by the LMA, the APLMA and the LSTA but also growing investor activism in relation to ESG-related financial risk areas.
We work with both lenders and borrowers to optimise loan documentation and reflect the important role ESG factors can play in lowering credit risk and delivering improved environmental and social outcomes for all stakeholders.