Sustainable Finance

Major Infrastructure Lenders Develop ESG Covenant Package for Infrastructure Fund

Published on: 20 January 2022 05:25 PM
by KnowESG
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A Brief Summary

An ESG Covenant Package has been developed by a group of major infrastructure lenders, including Aviva Investors, LGIM Real Assets, IFM Investors, Macquarie Asset Management, abrdn, BlackRock, and Allianz Global Investors, to develop a unified approach on ESG-related information and reporting requirements for infrastructure debt financings. The package is primarily focused on ESG reporting responsibilities and is mostly based on the EU's Sustainable Finance Disclosure Regulation (SFDR).

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According to the draft, the initiative aims to unify ESG data collection by providing a consistent set of requirements for borrowers when reporting to lenders on ESG matters, as well as facilitating lenders' compliance with increasing ESG disclosure obligations, as well as their own net zero obligations and investor demand.

The package is designed to be part of the term sheet negotiation stage for private market debt agreements in Europe, including funding for greenfield infrastructure building and refinancing operational infrastructure. The parties are asking for input on the proposed covenants, which will be accepted through the end of January.