A group of Infrastructure debt investors including GIIA members Aviva Investors, IFM Investors, Macquarie Asset Management, and Allianz Global Investors along with three others, have been working on behalf of the sector to develop an Environmental, Social and Governance Covenant Package. The initiative aims to:
(i) 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
(ii) 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.
View the documents below:
The ESG Covenant Package 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). For an Excel version of the Final Form report, or to provide feedback on either document, please email InfraDebtESGCovenants@avivainvestors.com All feedback should be sent by 31 January 2022.
The initiative was discussed at GIIA’s ESG working group in October 2021 we are pleased to make it available for comment to our wider membership and stakeholder network.