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Sustainable Finance: updated principles and guidance for the lending market

United Kingdom
27/04/2023
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Environmental, social and governance (“ESG”) factors are now a critical part of a funder’s credit analysis, with provisions being incorporated into loan documentation to incentivise borrowers to pursue an ESG strategy.

While the initial attraction of sustainable finance was cheaper pricing, there is now a growing acknowledgement in the market that the cost of compliance with ESG policies may well exceed the benefit of any loan pricing reduction. However, the need for compliance with new sustainability legislation paired with increased societal awareness of the need for energy efficiency and reputational concerns, has affected business’ investment strategies meaning that sustainable financing remains a key focus in the lending market.

This article, part of our Healthy Horizons guide to doing business responsibly in Life Sciences & Healthcare, examines the need in the finance market for consistency and outlines the guidelines for participants to follow. 

Click here to read the fifth publication in the series.

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