Amy Kennedy Quoted in The Lawyer on Growth of ESG Finance
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The Lawyer has quoted Akin Gump corporate partner Amy Kennedy in the article “Moving towards sustainable finance in an era of accountability,” which looks at the rise of environment, social and governance (ESG) finance within the corporate world.
The growing demand for improved ESG performance, the article says, has driven a deepening of the market and a diversification of new ESG finance products. Kennedy said there are certain sector-focused borrowers for which ESG criteria have more resonance. “Investors looking to distinguish themselves within the space,” she said, “are also keen to include these types of provisions, particularly if they themselves are encouraged by their own clients or portfolio managers to use ESG as a means of both measuring and enhancing investor outcomes.”
Kennedy said the use of ESG ratings to help guide decision-making can be helpful, and she expects to see more of it in the future, though it will be necessary to address a lack of consistency between ratings. That said, the prominence of ESG financing, she noted, is likely to increase after the coronavirus pandemic subsides, as ESG moves from being “a personal rhetoric to becoming a business imperative.”
Looking ahead, Kennedy predicts it will be necessary “to adopt a coordinated approach and standardization of metrics across the industry” with respect to ESG financing. This would include among investors, private equity professionals, portfolio companies, advisors and ratings agencies.
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