ESG (Environmental, Social and Governance) is everywhere. From
landmark climate regulations approved in Europe in June to new ESG
disclosure rules in China, from sustainable investments growing by
double-digit multiples to research that ESG methodologies
significantly enhance portfolio company performance − hardly
a day goes by where there isn't a new report that ESG is
soaring. This article continues our series of posts related to ESG
in Fund Finance by taking a deeper dive into KPIs (key performance
indicators), SPTs (sustainability performance targets) and UoPs
(uses of proceeds), the foundational drivers of finance-related
ESG. We analyze these according to the SLLP (Sustainability Linked
Loan Principles) and GLP (Green Loan Principles) promulgated by the
LSTA, LMA and APLMA so that you can structure them effectively in
your deals. It's a veritable alphabet soup of ESG.