What can loan managers do to manage ESG risks?


Far more attention is being paid by investors to environmental, social and governance (ESG) matters. This raises certain challenges for the private European loan market compared to the exchange-traded equity and debt worlds. But lenders are not without influence – quite the opposite.

Unlike company owners (and their backing fund investors), lenders tend to have very limited influence over the (design, management and implementation of) ESG policies of portfolio companies. However, Fiona Hagdrup, leveraged loans fund manager, finds there are certain advantages afforded by both being private-side and by appropriate use of the necessarily iterative relationship between lender and borrower.

In this Investment insight, Fiona explains more about our approach to ESG in the European leveraged loan market and illustrate why we believe disclosure and governance are key to responsible lending.

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