The ESG performance will be measured quarterly, with the average performance of the portfolio companies judged by reference to three KPIs.
By Paul Davies, Dominic Newcomb, Farah O’Brien and Michael Green
On 11 June 2020, private equity firm EQT announced that it has entered into an environmental, social, and governance–linked fund-level subscription credit facility (SCF) with an upper limit of around €5 billion[1]. The SCF, which is currently at €2.3 billion, is believed to represent the largest ESG-linked facility seen to date on the global fund financing markets, and is further evidence of the increasing interest in ESG among private equity firms.
The economic impact of COVID-19 has required unprecedented state intervention and support for companies and individuals in countries around the world. Now, certain climate policy advisors and advocates are calling for climate change policy to be integrated into such support.
As reported by a number of German newspapers and the environmental press, a dispute between the US proxy advisory firm Institutional Shareholder Services (ISS) and the German industrial image processing company Isra Vision came to a rapid conclusion before the Regional Court of Munich when ISS withdrew its objection against a preliminary injunction. As a result, the relevant ESG rating concerning Isra Vision was not published.
On 6 March 2020, the UK’s Financial Conduct Authority (FCA) launched a consultation primarily focused on enhancing requirements on certain listed companies to make climate-related disclosures (the Consultation). In particular, it is proposed under the Consultation that such listed companies will be required to state that they have reported in line with the recommendations made by the Taskforce on Climate-related Financial Disclosures (TCFD) or explain why they have not complied with such step. This demonstrates further momentum behind the increasingly widespread adoption of the TCFD recommendations in the public markets (as well as the private markets).
Environmental, social, and governance (ESG) was more prominent than ever in 2019, as issues such as climate change and corporate responsibility regularly appeared in news cycles worldwide. This year, observers can expect even more focus on this area, with public awareness of ESG at an all-time high, and major ESG-related events set to take place.
The French Parliament has adopted a new climate energy package to tackle the effects of climate change and boost France’s energy transition endeavors to reach carbon neutrality by 2050. As per Article 4.1 of the 2015 Paris Agreement, carbon neutrality is defined in the package as the balance, across the national territory, between anthropic emissions by sources and removal of greenhouse gases by sinks. Six key goals comprise this latest legislation.