In addition to the traditional (corporate and/or securities-based) ratings commonly obtained by an issuer in connection with an international debt offering, corporates may now avail themselves of a new metric — the ESG rating. To date, there is no consensus on how ESG ratings, which assess a company’s ESG performance, are derived or what they reflect. Baker McKenzie lawyers Rob Mathews, Ben Bierwirth and Elaine Baynham consider some of the challenges posed by ESG ratings in the context of debt securities offerings.

In addition to the traditional (corporate and/or securities-based) ratings commonly obtained by an issuer in connection with an international debt offering, corporates may now avail themselves of a new metric – the ESG rating. To date, there is no consensus on how ESG ratings, which assess a company’s ESG performance, are derived or what they reflect.
As more corporate bonds are issued linked to ESG ratings, these ratings will become more material, and a consensus around how ESG ratings should be disclosed and regulated will directly impact their reliability.

In this series of short podcasts, Baker McKenzie ESG Debt & Equity experts discuss key tips and things you should you when considering raising sustainable finance, including the ever-evolving legal and regulatory requirements across regions.

In this edition of In the Know, we look at Environmental, Social and Governance (ESG) standards in Sustainability Linked Lending (in both loans and bonds). We address the ESG margin ratchet, how it interacts with ESG targets and testing strategies, and potential reinvestment obligations arising out of those interest savings, in each case, within the European leveraged finance market.

Sustainable Finance as a trend and financing option has grown exponentially and shows no signs of slowing down. In this series of short podcasts, our ESG Debt & Equity experts discuss key tips and things you should you when considering raising sustainable finance, including the ever-evolving legal and regulatory requirements…

Sustainable Finance as a trend and financing option has grown exponentially and shows no signs of slowing down. In this series of short podcasts, our ESG Debt & Equity experts discuss key tips and things you should you when considering raising sustainable finance, including the ever-evolving legal and regulatory requirements…

Share Sustainable Finance as a trend and financing option has grown exponentially and shows no signs of slowing down. In this series of short podcasts, our ESG Debt & Equity experts discuss key tips and things you should you when considering raising sustainable finance, including the ever-evolving legal and regulatory…

The next in series of our ESG Debt & Equity group podcasts focuses on the growth of the green bond market, the 144A liability concerns associated with these and buy-side incentivization. This topic was also produced as an article, available to download here.

The next in series of our ESG Debt & Equity group podcasts focuses on the growth of the green bond market, the 144A liability concerns associated with these and buy-side incentivization. This topic was also produced as an article, available to download here.

In the wake of the COVID-19 crisis, organizations of all types are enacting measures to preserve liquidity, reduce costs and plan for the potentially slow recovery back to pre-crisis levels or, in some industries, a return to a new normal. As a result, corporate risk profiles for the near, medium…