ESG and Credit Risk

An overlay of ESG for credit appraisal

With the increasing consensus in expanding the conversation around targeted outcomes of running businesses, there has been a growing need to consider the impact a business makes to all stakeholders, the community at large, and the environment. This change in thinking has been triggered by accelerating climate change over the last several years, with the global financial services community coming together to acknowledge how lending institutions can play a key role in not only mitigating adverse fallout, but also facilitate positive change.

Lending is at the core of the business at financial institutions and is driven by, and also influences, the strategic direction for these entities. Having the ESG lens applied to lending decisions is a clear actionable manner in which financial institutions can proactively drive towards the objectives mentioned earlier.

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