The integration of environmental, social and governance (ESG) factors in the leveraged finance market is growing rapidly. There is a growing need for standardised ESG guidance and a desire for the incorporation of ESG disclosures into primary deal documents.
These were some of the key points to arise from a discussion held in November 2020 between fixed income investors, borrowers, bankers, lawyers, credit rating agencies and private equity sponsors, convened by the PRI and the European Leveraged Finance Association. The workshop attracted over 80 participants to discuss disclosures of material ESG information. We explore these themes in this Insights report, and look forward to continuing our work with credit analysts, and companies and their advisers, in our workshops scheduled for 2021.
These discussions covered topics from the ELFA’s Guide for Company Advisers to ESG Disclosure in Leveraged Finance Transactions, drafted by senior legal and sell-side professionals, and formed part of the PRI’s ongoing ESG in credit risk and ratings initiative. The input and perspectives received during the event were incorporated into a revised version of the Guide, published in early 2021, and also into sector-level ESG Fact Sheets.
The updated Guide for Company Advisers to ESG Disclosure in Leveraged Finance Transactions is now available via ELFA’s website, where the ELFA-PRI sector-specific ESG Fact Sheets can also be found.
