ESG: Three Factors, But A Single Issue

The emergence of ESG as a driving force of business and finance in recent years has created new demands on companies, investors and regulators alike. The ever-evolving regulations bring significant challenges for project sponsors to address, as part of their day-to-day management. Often, the response has been to add capacity and capability, develop new sources of expertise and create departments that can respond to the new requirements.

Push – but also pull

It's not just about meeting increasingly stringent standards in the terms of a compliance exercise. There are also material business benefits that can be generated for companies that take the lead in adopting ESG processes. These are not only reputational (which aids recruitment), but market-leading ESG policies that give project sponsors an edge in the auction process. There is a proven 'greenium', when doing green financings (such as Sustainability Linked Bonds (SLBs), and green bonds). There is also the