Green financing is often not top-of-mind for companies outside the renewables sector when they consider their financing options, but it should be. Two trends, the “greening” efforts of many industries and the growing availability of green and environmental, social and governance (ESG)-linked loan products and sources, have resulted in green and ESG-linked financing becoming an increasingly relevant source of funding for all industry sectors.
A growing array of innovative debt products is available to finance a wide variety of green projects which can help companies meet their sustainability targets and comply with industry initiatives and regulatory requirements. Further, they can provide companies access to capital sources not otherwise available (i.e. dedicated green and ESG capital pools), lower funding costs, more certain paths through investor credit approval processes, and improved reputations for green and socially-responsible business practices.
Partner Cynthia Urda Kassis, counsel Jason Pratt and Mehran Massih and associate Augusto Ruiloba authored two articles on this topic, one published by Project Finance International, titled “Green and ESG Loans – Emerging Trends,” which addresses green/ESG-linked financing generally, and another published by the Mining Journal, titled “ESG Loans a New Source of Mining Finance,” which is addressed to the mining sector specifically.
As the world emerges from the current pandemic, we expect that there will be a return to continued robust growth of the green finance market.