Growth in sustainability-linked loans boosts ESG ratings firms


Increasing issuance of sustainability-linked loans by top investment-grade companies is boosting lenders’ reliance on independent ratings agencies to score and monitor firms’ environmental, social and governance (ESG) performance as investors call for greater transparency.

Sustainable lending is overtaking green loans as more companies with robust ESG strategies use key performance indicators (KPI) to measure carbon emissions reductions or water conservation metrics than can satisfy strict use of proceeds criteria that classify deals as green.

Independent sustainability rating firms have been scoring companies’ ESG performance for more than two decades, but third-party ratings are gaining importance as sustainability-linked loans gather momentum.

Read the full article

Share Button