ESG Lending and Investment

Program Description:

As the world intensifies its efforts to protect the ecosystem, promote social equity, and ensure corporate responsibility, Environmental, Social, and Governance (ESG) principles have emerged as essential tools to guide individuals and organizations in making sustainable decisions.

The future growth of organizations will increasingly depend on their ability to transition to a low-carbon economy powered by clean technologies. This entails integrating ESG factors into business strategies, policies, and procedures, including evaluating clients’ creditworthiness and aligning investments with a low-carbon environment.

ESG is a rapidly evolving field, and it is only a matter of time before legislation transforms ESG factors into mandatory and enforceable rules. As the world looks toward the future, regulators and policymakers are expected to emphasize the adoption of ESG standards.

Leading organizations are taking proactive steps toward sustainable practices before these become mandatory. They adopt a long-term perspective, moving beyond compliance commitments to the genuine application of ESG standards to achieve business success.

Key Topics:

1. What is ESG and Why Does It Matter?
   • Understanding ESG and its significance.
   • What does each component measure?
   • Environmental, Social, and Governance dimensions—comparing to sustainability.
2. ESG Assessments and Variables:
   • Environmental dimensions.
   • Social dimensions.
   • Governance dimensions.
   • Challenges in collecting, analyzing, and reporting ESG metrics.
3. ESG Models:
   • Core impact models:
     • Financial materiality.
     • Impact materiality.
     • Dual materiality.
   • ESG methodologies:
     • Absolute vs. relative models.
     • Weighting and aggregation methods.
     • Average vs. granular evaluations.
4. Applications of ESG:
   • ESG in credit analysis.
   • Green and sustainable loans (SLLs).
   • Defining measurable ESG targets.
   • Key Performance Indicators (KPIs): Science-Based Targets (SBTs).
   • ESG ratings vs. credit ratings: Aligning sustainability with creditworthiness.
5. ESG Investment:
   • ESG oversight and governance:
     • Alignment with green classifications.
     • Transparency and data reliability.
     • Conflict of interest mitigation.
   • Internal controls on ESG applications and reporting.
6. Roles and Responsibilities:
   • Board of Directors and senior management.
   • Risk management.
   • Financial management.
   • Internal audit and compliance.

Detailed Objectives:

• Integrate ESG principles and models into corporate governance practices, business risk strategies, models, and policies.
• Protect asset portfolio value, including loans and investments, through sound lending and investment decisions with a sustainability focus.
• Manage risks associated with ESG-related issues, especially credit and market risks.
• Apply and analyze sustainability, including ESG models, due diligence, and credit and investment proposal selection processes.
• Overcome quality challenges related to ESG data.
• Design, review, and implement controls for ESG applications and reporting processes.

Target Audience:

• Strategic Sustainability Officers.
• Risk Management Officers.
• Internal Audit Officers.
• Compliance Officers.
• Financial Management Officers.