Embedding ESG Practices Into Loan Criteria
The North American Private Finance investment team completed their first ESG-linked loan in Q4 2021. Certain criteria promoting positive ESG practices and policies were embedded in the loan documentation for this new investment. This includes encouraging the portfolio company to employ staff dedicated to managing the firm’s ESG practices and policies, undertaking additional ESG analysis, including measuring the company’s greenhouse gas footprint, and reporting on the firm’s actions.
Since the end of 2021, the assigned deal team has been in regular communication with the Private Equity Sponsor and Company Management Team with regards to trading updates, forecasts, and the ESG criteria tracking.
As the deal closed recently, the criteria have not yet been met, but the company is working towards achieving them and progress has been positive to date.
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