ESG Financing

Global sustainability bond & loan volumes (EUR b) Record green and ESG linked issuance in 2020

ESG-linked loan pipeline (EUR b) Sustainable linked loans suit any company from any sector

ESG Financing - Market observation per 8 March 2021 -

ESG linked loans gather pace in European leveraged and private debt markets

  • Sustainability linked loans in the European leveraged and private debt market are gaining momentum, following the widespread trend in the IG market
  • There is a collective desire from investors, issuers and banks to incorporate ESG in their business
  • Sustainability linked loans contain a margin adjustment based on the achievement of pre-agreed goals and are a great tool to market a company’s ESG metrics and commit to a sustainability strategy

Sustainable instruments looking green are facing pressure from investors

  • Sustainability-linked bond and loan volumes have spiked in 2020, yet draw concerns over greenwashing if ESG targets are too soft
  • It is key that a corporate defines suitable yet ambitious ESG targets, which encourage behaviour rather than validating existing behaviour
  • Zanders hosted the webinar ‘Trends in Sustainability Linked Loan’, providing insights in defining ambitious KPIs. Feel free to request a recording or a copy of the slides via l.coppelmans@zanders.eu.

Sustainable linked loans are a great alternative for industries that are not green by nature

  • Sustainable linked loans and bonds allow proceeds to be allocated to GCP instead of financing specific green assets or projects
  • Majority of 2020 global ESG bond volumes are issued by governments & agencies and financials. Sectors issuing green and ESG loan volumes are more dispersed
  • Markets expect the appetite for ESG financing instruments will continue as regulation is reinforcing the trend