Advanced ESG & Climate Finance Loans Structuring for Practitioners

Part 1

Green & Social Financing Frameworks

Two case studies to demonstrate the structure and rationales of green and social financing frameworks. Best market practice and trainer insights will enable delegates to evaluate these key documents for loan projects.

Green Loans

Case Study 1: Green Finance: Assess the coherence and sufficiency of a significant existing corporate green financing framework.

• Mapping a corporate strategy to the UN SDGs.

• Assessing the framework’s adherence to best market practice.

• Green loan principles within a framework:

• Use of Proceeds

• Project Evaluation

• Project selection

• Deployment

• Classification of risks and exclusions.

• Using Second Party Opinion/Verification reports to gather due diligence information

Social Loans

Case Study 2: Social Finance: Assess a financial institution’s social finance programme and framework.

• Mapping the bank’s strategy to the UN SDGs

• Assessing the framework’s adherence to best market practice.

• Challenges of social project classification.

• Social loan principles within a framework

• Use of Proceeds

• Project Evaluation

• Project selection

• Deployment

• Classification of risks and exclusions.

• Using Second Party Opinion/Verification reports to gather due diligence information.

Green and Social Impact Measurement

Achieving environmental and social impact and making a contribution to the achievement of the SDGs is key for many lenders and investors. This section examines the implications for the use of proceeds instruments and demonstrates an approach to how it can be measured and reported.

Impact Reporting: Green and Social Projects (Using the ICMA Framework)

• Recommended sector-specific guidance

• Recommended core Indicators

• Mapping to SDGs – one approach

Impact Metrics

• Green/Social loan outputs

• Green/Social loan outcomes

• Green/Social loan Impact

• Examining how to compile and report on green and social project impact

Part 2

The second day utilises the learning from Day 1. Sustainable and Sustainability-Linked loans will be the focus.

Sustainable Loans

• Understanding the importance of a ‘Just Transition’

• Combining green and social loan due diligence

• Assessing the interplay between the two components

Sustainability-Linked Loans

• SLLs as Transition Instruments

• Evaluating sustainability-linked loans

• Key Performance Indicator selection and current trends

• Establishment of meaningful Sustainability Performance Targets

• Market evolution: borrower/issuer missed targets and the ramifications for lenders/investors

Case Study 3: Analysing a sustainability-linked corporate framework + Second Party Opinion

• How to assess the coherence of a sustainability-linked finance framework: Mapping corporate strategy and SDGs commitment

• Adherence to best market practice

• Mapping to LMA Sustainability-Linked Loan Principles

• Determining the borrower’s ambition

• Understanding the mechanics and choices of KPIs and SPTs

• Common primary and secondary KPIs

• Materiality

• Strategic significance

• Measurability

• Benchmarking

• SPT disclosure

Wrap Up with Q&A

Training Objectives

Designed for investors and lenders in ESG loans, this course focuses on developing advanced due diligence and loan product structuring knowledge. Emphasis is on practical and implementable skills, enabling delegates to engage confidently in this rapidly growing asset class. Participants should already be familiar with the concepts and features of ESG loans.

Examine, as an investor/lender/advisor, the mechanics of assessing and structuring green, social, sustainable and sustainability-linked loans using best market practice and current case studies in the loan and capital markets.

• Conduct due diligence on a corporate Green Financing Framework

• Understand and apply best practices for Green loan monitoring and Impact reporting

• Analyse and conduct due diligence on a Social financing framework

• Understand and apply best practices for social loan monitoring and Impact reporting

• Examine Sustainable loans: combining environmental and social projects in financings

• Assess sustainability-linked loans. We explore best market practices in KPI and SPT selection, as well as mechanics and performance scenarios over time

• Examine loan monitoring and impact reporting best practices for green and social loan case studies

Training Course Summary

ESG loans have grown exponentially since 2018. This advanced course equips participants with the skills to strengthen their due diligence and loan structuring expertise. In doing so, investors, lenders, and their advisors gain clearer insight into what to expect from borrowers and the rationale behind it.

The absence of certified public market data in the loan market creates a practical challenge. At Redcliffe Training, our sessions equip you to source and apply data from multiple channels, providing your investment committee with deeper, more informed insights.

This course is a deep dive into green, social, sustainable and sustainability-linked loans and uses current case studies as the basis of learning. Participants are encouraged to bring their own relevant ESG challenges to the programme to deepen learning and application.