ESG - Commercial Lending

Regulators, investors and customers are increasingly looking at how banks are addressing issues such as climate change and governance, including how their loans books take into account ESG considerations. Sustainable finance looks to reward borrowers who perform well on ESG factors, given that this likely signals a strong resilient business, able to service debt finance.

The course looks at key ESG issues, considering how these issues impact perceived risks at industry and firm level. Approaches to initially screen investments are analysed and the ways to incorporate ESG factors into a formal credit analysis processed are covered. The latest development in ESG reporting and the role of credit rating agencies in producing data useful for commercial banks are considered. The course, through using case study examples, discusses the different types of sustainable lending facilities, for example Green loans and Sustainability linked loans.

Following this course, you will be able to:

• Explore the role of banks in relation to ESG and their importance in transitioning to a net zero carbon position.
• Explain approaches to incorporate ESG into the fundamental credit analysis process using models like the UN’s SDG.
• Understand the latest company reporting requirements in relation to ESG and the use of credit rating organisations in supplying ESG data.
• Explain the role of bank loan managers in actively engaging firms in their progress on ESG-related issues.
• Understand different types of ESG lending including Green loans and Sustainability-linked loans.

This is a non-examinable course. On completion of the course and the in-course assessments, you will be awarded a global BPP certificate.

This course is not examined, therefore the Pass Assured Guarantee is not relevant to this course.