The interest in and availability of ESG-focused investments has exploded in recent years. Last year, the International Capital Markets Association published its Sustainability-Linked Bond Principles, allowing the creation of debt products that hold issuing companies accountable to achieving independently certified sustainability or ESG objectives. Unlike “green bonds”, which require proceeds to be used strictly on green projects, sustainability-linked bonds focus on outcomes rather than specific investments. And, so far, investors are eager to utilize them. So, who is likely to pursue this type of bond? Are companies getting more favorable pricing? Is the new US political and regulatory environment accelerating demand?
In this episode of Connected With Latham, Lauren Anderson speaks with fellow Houston partners David Miller and Trevor Lavelle about the growth of green financing and the rapid uptake of sustainability-linked bonds in the debt capital markets, as well as prospects for the future of such bonds in the fast-evolving energy and infrastructure sector.