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Amid an unprecedented global health crisis, record-breaking activism against social injustices and rapidly escalating environmental concerns, the collective rallying cry for change is deafening.
Consequently, regulatory and market momentum around commercial loans that have a positive environmental, social and corporate governance (ESG) impact is building exponentially.
Loeb & Loeb is assisting one of the world’s most sophisticated banking institutions as it embraces the ESG agenda. We are helping our client understand how ESG criteria can be meaningfully identified and measured. And we structure and negotiate transactions that promote good governance, sustainability and social responsibility.
Our commercial finance lawyers know the market with respect to ESG dynamics and performance metrics. We are evaluating the ESG credentials of prospective borrowers, establishing market-relevant performance targets in ESG-linked loans, and drafting provisions that make smart business sense for our client, while incentivizing the borrowers’ commitment to ESG principles.
Loeb & Loeb’s team has been particularly active in structuring complex financing arrangements that focus on diversity-related corporate governance issues. We’ve collaborated with our client on more than $600 million in fund financing transactions that tie to ESG performance. These secured loan facilities to private equity funds include provisions that reduce the interest rate charged to the funds if the number of minorities on the boards of directors of the funds’ portfolio companies increases year over year.
Our work on these matters has also assisted lender clients seeking to meet their own ESG goals.
The stakes have never been higher for capital providers—and businesses of all types—to integrate sustainability and social responsibility into strategic operations and decision making.
At Loeb & Loeb, we’re proud to be at the forefront of this trend, helping put these values into practice—for our clients and for our firm.