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How to generate maximum impact through ESG-linked loans and ESG covenants

10 March, 2021Chris McHugh

Real assets can play a vital role in tackling climate change. But that includes deterring carbon intensive activity, as well as investing in 'green' and sustainable finance.

In his white paper, Investing with ‘carrots’ and ‘sticks’: generating maximum impact through ESG-linked loans and ESG covenants, Stanley Kwong from Aviva explains different incentives and deterrents.

Download the white paper: Investing with ‘carrots’ and ‘sticks’: generating maximum impact through ESG-linked loans and ESG covenants

climate-related stress testing webinar When we write about financial markets we often think of the traded debt and equity of large publicly quoted corporations.

An equally important part of the financial system are the private equity and lending markets.

These private markets are different due to low liquidity, closer client relationships and more concentrated ownership of both debt and equity. These characteristics change the power balance between companies and their debt and equity investors.

This can be particularly true of direct investments into physical ‘real assets’ such as infrastructure and real estate. This closer relationship can be a significant benefit when it comes to investing for impact and sustainable transition.

In this paper Stanley Kwong from Aviva Investors explains different approaches in the form of incentives and deterrents. This form of financing is still developing and has the potential to inspire new templates for investing and lending in public markets.

Download the white paper: Investing with ‘carrots’ and ‘sticks’: generating maximum impact through ESG-linked loans and ESG covenants

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