Sustainability-linked finance: An effective ESG partnership or an automobile to have greenwashing?
From the Sehoon Kim and Nitish Kumar, University from Fl; Jongsub Lee, Seoul National School, and you may Junho Oh, Hankuk School off Foreign Degree
Resource arrangements between investors and you will enterprises are increasingly providing environmental, personal, and you can governance (ESG) inquiries into consideration, highlighting an evergrowing request out of financial stakeholders and you will broader society that they are doing therefore.
Even after loans from banks being the no. 1 way to obtain financial obligation capital getting firms around the globe, absolutely nothing is well known regarding their role regarding easily changing ESG-contingent financing space.
In our studies, i file and you can characterise the development away from green financing in the world, browse the the character out of financing agreements for the incentivising borrowers‘ durability duties and you can highlight the importance of transparent disclosures to alleviate greenwashing issues.
The rise out-of green credit
Lately, new renewable financing business is continuing to grow significantly, determined largely by common usage of general-objective sustainability or ESG-linked finance, which have words contractually linked with brand new durability overall performance from borrowing people.
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