Financial Services Directory
Mutual Fund Performance Chart
Separately Managed Accounts
Start Date: 3/7/2019 12:00 PM EST
End Date: 3/7/2019 1:00 PM EST
In April 2017, ING Group issued the world’s first-of-its-kind sustainability-linked loan to Philips, coupling the interest rate of the EUR 1 billion loan to the company’s sustainability performance. By June 2018, ING Group closed 15 similar deals where the bank would lower the cost of borrowing by between 5% and 10% based on the company’s ESG rating.
Since then, other forward-looking lenders and borrowers have followed suit, linking ESG ratings and related KPIs to interest rates of loans and other financial instruments. This new use case for ESG ratings dovetails a broader shift towards incentivizing sustainability improvement among corporates via capital raising activities.
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