Credit risk

ESG in Credit Risk: Workshop on ESG Disclosure in Leveraged Finance | Summary of the workshop

The integration of environmental, social and governance (ESG) factors into the leveraged finance market is growing rapidly. There is a growing need for standardized ESG guidelines and a desire to integrate ESG information into key transaction documents.

These are some of the key points to emerge from a November 2020 discussion between bond 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 the disclosure of material ESG information. We explore these themes in this Insights report and look forward to continuing our work with credit analysts, companies and their advisors at our workshops scheduled for 2021.

These discussions focused on topics drawn from ELFA’s Guidance for Corporate Advisors on ESG Disclosure in Leveraged Financial Transactions, written by legal and sell-side professionals, and was part of the ongoing ESG initiative on credit risk and PRI ratings. Inputs and insights received at the event were incorporated into a revised version of the guide, released in early 2021, as well as sector ESG factsheets.