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How Sustainable Financing Is Driving Corporate Treasuries to Evolve

Investors’ interest in companies’ ESG performance, and in ESG-focused investment options, may be pivotal in convincing organizations to take sustainability issues seriously.

By Ana Carolina Oliveira | February 03, 2022 at 12:34 AM
Stock illustration: Climate change

Environmental, social, and governance (ESG)–related news was splashed across headlines throughout 2021. The U.S. and U.K. governments have set the most ambitious carbon-reduction goals on record. Anheuser-Busch InBev announced a $10.1 billion sustainability-linked revolving credit facility, the largest ever for a publicly listed alcohol company. And BlackRock—the loudest investor voice calling for companies to improve in terms of ESG—put its own reputation on the line with a $4.4 billion loan tied to improving the diversity of its workforce

On June 15, the U.S. Securities and Exchange Commission (SEC) ended a comment period on new climate change disclosure rules. Now, SEC staff are re-evaluating requirements around corporate ESG disclosures , with an eye toward the public input they’ve received. The agency’s intention is to ensure the SEC is “facilitating the disclosure of consistent, comparable, and reliable information on climate change.” Separately, the SEC issued a warning to investment firms to rein in misleading marketing of ESG funds amid a backdrop of record inflows.

Pressure from investors, regulators, and peers is compelling CEOs across America to weigh in on ESG-related issues such as climate change and voting rights. According to a survey jointly released last April by ING and research firm Longitude, the majority of corporate executives (57 percent) are accelerating their organization’s green and social-transformation plans. American boards and C-suites are increasingly feeling the need to act.

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