Sustainability, Risk And Value In Mainstream Lending

Sustainability considerations in the loan market are often discussed through the lens of labelled products: green, social, transition, and sustainability-linked loans. However, a more fundamental development is underway. Across mainstream lending, sustainability-related factors are increasingly integrated into ordinary credit, risk and value decisions, regardless of whether a financing carries a sustainability label.

A new article published by the Loan Market Association explores why this shift is taking place, and what it means for lenders and borrowers. The full article is available here: Sustainable Lending Microsite - LMA.

From label to financial relevance

Any factor capable of reducing collateral value, increasing borrowing costs or affecting a lender’s appetite to finance is a credit issue, as is one that may improve margins, reduce volatility and strengthen competitiveness. Regardless of labels, sustainability-related factors increasingly have these financial consequences.