Feedback Welcomed on New ESG Covenant Package

A group of Infrastructure debt investors including Aviva Investors, LGIM Real Assets, Macquarie Asset Management, abrdn, BlackRock, Allianz Global Investors and one other, have been working on behalf of the sector to develop an Environmental, Social and Governance Covenant Package.  The initiative aims to:

  • Unify ESG data collection by providing a consistent set of requirements as “best practice” for borrowers when reporting to lenders in respect of ESG matters; and
  • Facilitate lenders’ compliance with their increasing ESG disclosure obligations under applicable EU and/or UK law and regulations and, where relevant, lenders’ compliance with their own net zero targets and investor demand.

The ESG Covenant Package attached has been designed to be provided and considered as part of the term sheet negotiation stage between the relevant parties, in order to facilitate discussion on ESG reporting obligations under the finance documents.

To ensure that the ESG Covenant Package has the widest reach, market recognition and is available for adoption by any type of lender, it is intended that it will be shared and further developed with the Loan Market Association in early 2022.

Feedback is welcomed on the design and content of the ESG Covenant Package (including a short form version 1 report and long form version 2 report – the contents of and the differences between the two versions are explained in the guidance notes to the ESG Covenant Package) attached.  Feedback can be provided by email to InfraDebtESGCovenants@avivainvestors.com and should be sent by 31 January 2022.

Documents

The ESG Covenant Package (Word document)

Form of Report (Excel document)

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