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Europe has seen an explosion of loans encouraging better borrower behaviour in relation to ESG issues. We look at some of the key developments so far.
ESG and sustainability are now being worked into deal documentation, but it may take a while before the asset class is seen to be truly making a difference.
Arcmont has released a guide to structuring sustainability-linked loans as it joins the likes of Ares, Amundi and Barings in offering margin discounts linked to ESG KPIs.
Moving to green energy will need huge sums of capital. Private lenders are well placed to marry institutional money to vital projects. John Bakie reports
Credit funds are making significant leaps forward in how they tackle ESG risks in the portfolio and at firm level, but there is much more to do, say Bridgepoint Credit’s Hamish Grant and Cathy Wang.
Private debt may have been later to embrace ESG than private equity, but industry approaches are evolving quickly, says Kartesia’s Coralie De Maesschalck.
Tackling global warming will require a commitment from the whole financial system to deploy capital sustainably. But where does private debt fit within this?
The technology and expertise exist to communicate non-financial KPIs to LPs with regularity, but don’t expect it to happen any time soon.
A thoughtful approach to responsible investment is required to meet the ESG needs of private debt investors, say CORDET’s Christian Ovesen, John Sealy and Henrik Wikerman.
Managers are preparing for a swathe of new ESG reporting requirements, with delayed EU taxonomy rules that come into force early next year seen as a potential gamechanger.