Alternative Credit Managers Launch Integrated ESG Disclosure Tool | News and press

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Standardized template to improve transparency and accountability

November 8, 2022 – A group of leading alternative asset managers and industry bodies in private and heavily syndicated credit markets today announced the launch of the ESG Integrated Disclosure Project (ESG IDP) model.

  • The ESG IDP Model will improve transparency and consistency for private companies and credit investors by providing a standard format for ESG-related disclosures.
  • The model provides private companies with a baseline from which to develop their ESG reporting capacity.
  • For investors, the IDP ESG Model improves their ability to identify industry-specific ESG risks in their credit portfolios and compare meaningful data across alternative asset managers more consistently.

The model is the creation of the ESG IDP, an industry initiative bringing together leading lenders in the private and syndicated credit markets to improve transparency and accountability. The ESG IDP is led by the Alternative Credit Council (ACC), the private credit affiliate of the Alternative Investment Management Association (AIMA), the Loan Syndications and Trading Association (LSTA) and the Principles for Responsible Investment ( PRI) supported by the United Nations. ).

Founding partners of this new initiative include Apollo Global Management and Oak Hill Advisors who, together with the ESG IDP Executive Committee, will now lead efforts to drive adoption of the ESG IDP model across the market.

The ESG IDP is also supported by a coalition of market players, including CDP, the ESG Data Convergence Initiative and the Loan Market Association.

Jiri Krol, global head of the Alternative Credit Council, said: “SMEs and mid-caps require a more proportionate approach to ESG disclosure than large public companies. By simplifying and harmonizing existing market practices, this new industry-led initiative will reduce the burden on borrowers while improving the materiality and comparability of ESG information for investors. We look forward to working with our members and partners to support the widespread adoption of this disclosure model..

Tess Virmani, Executive Vice President and Head of ESG at LSTA, said: “Investors and regulators have made it clear that the status quo is unsustainable, and the credit market recognizes the need for harmonized ESG reporting. We are delighted to officially launch this resource – harmonization is the next critical step to improving the availability of consistent and reliable ESG information and fostering responsible ESG growth in credit markets.

Carmen Nuzzo, Head of Fixed Income at PRI, declared: Drawing inspiration from the PRI ESG Map, which highlighted the significant overlap of Many competing ESG standards and frameworks, this new model will allow private creditors to have a “bigger voice” during the investment process. It will streamline the collection of ESG information, while providing opportunities for meaningful conversations with borrowers. Its success now depends on its adoption, which we strongly urge, with the other supporters of the ESG IDP.

Michael Kashani, head of ESG credit at Apollo and first chair of the ESG IDP, declared, “I am delighted to be part of the ESG IDP, as it represents an important step in addressing current ESG disclosure issues in private credit markets. We believe this harmonized approach will increase the availability of ESG information for LPs and GPs.

Jeff Cohen, Head of ESG and Sustainability at Oak Hill Advisors and Senior Vice President of the ESG Integrated Disclosure Project, declared: We are delighted to contribute and support the ESG IDP, which applies a credit lens to globally recognized SASB standards to prioritize the subset of ESG factors most likely to be central to a company’s operations and , therefore, beneficial for underwriting lenders. . The ESG IDP aligns with the interests of sponsors and responds to the questionnaire fatigue felt by companies.

Catherine Isabelle, Senior Director, Responsible Investment, PSP Investments and Head of the EDCI Private Debt Working Group, Member of the EDCI Steering Committee, said: “The ESG Data Convergence Initiative (EDCI) supports the inclusion of EDCI metrics in the ESG Integrated Disclosure Project Template. We believe that technology disclosure of EDCI metrics in the model will provide better information to LPs and GPs to make improvements over time on critical issues.

Radhika Mehrotra, Associate Director, Capital Markets, CDP North America, said: “CDP recognizes the value of the ESG Integrated Disclosure Project (ESG IDP) and how it aims to increase the availability and comparability of material ESG information for LPs and GPs investing in the private and broadly syndicated credit markets. .”

Gemma Lawrence-Pardew, Head of Sustainability, Director – Legal, Loan Market Association, declared: “Reliable and accurate ESG information is essential for investors to channel capital into sustainable activities and companies. The ESG Integrated Disclosure Project provides a clear and transparent approach to ESG disclosure and provides companies with clear guidance on what information investors need. The LMAs are delighted to support such a valuable project.

FAQs

Where can I find the ESG Integrated Disclosure Project (ESG IDP) template?

The model and supporting teaching materials are available at www.esgidp.org.

Who should/can access it?

The model is accessible to everyone. It is designed to be completed by corporate borrowers and shared with their lenders. Companies can access the model themselves or it can be shared with them by their lender(s) (or the arranger in the case of a syndicated loan).

And then ?

The ESG Integrated Disclosure Project Executive Committee will review the template and make necessary updates on an annual basis.

About Alternative Credit Counseling (ACC)

The Alternative Credit Council (ACC) is a global body representing asset management companies in the area of ​​private credit and direct lending. It currently represents 250 members who manage over $600 billion in private credit assets. The ACC is an affiliate of AIMA and is governed by its own Board of Directors which ultimately reports to the AIMA Council. CCA members are an important source of financing for the economy. They provide financing to middle market companies, SMEs, commercial and residential real estate developments, infrastructure as well as commercial and receivables activities. The main objectives of the ACC are to provide advice on policy and regulatory issues, support broader advocacy and education efforts, and generate industry research with a view to enhancing the sustainability of the sector and wider economic and financial benefits. For more information, visit www.lendingforgrowth.org.

About LSTA

The LSTA is a not-for-profit trade association made up of a wide range of members involved in the origination, syndication and negotiation of business loans. LSTA’s more than 600 members include commercial banks, investment banks, broker-dealers, hedge funds, mutual funds, insurance companies, fund managers and other institutional lenders, as well as service providers and vendors. The LSTA undertakes a wide variety of activities to foster the development of market policies and practices designed to promote fair and equitable market principles and to encourage cooperation and coordination with businesses facilitating loan transactions. Since 1995, the LSTA has developed standard practices, procedures and documentation to improve market efficiency, transparency and certainty. For more information, visit www.lsta.org.

About the Principles for Responsible Investment (PRI)

The Principles for Responsible Investment (PRI) are the world’s leading promoter of responsible investment. Supported by the United Nations, it works to understand the investment implications of ESG factors and to help its international network of signatory investors integrate these factors into their investment and ownership decisions. The PRI act in the long-term interests of its signatories, the financial markets and economies in which they operate and, ultimately, the environment and society as a whole. Launched in New York in 2006, the PRI now has over 5,000 signatories managing over $120 trillion in assets under management.

contacts

Profile Advisors for LSTA
Rich Myers
[email protected]

LOVE
Drew Nicol
Associate Director, Research and Communications
[email protected]

IRP
Rojin Kiadeh
Acting Head of Press
[email protected]

Global Apollo Management
Joanna Rose
Global Head of Corporate Communications
[email protected]

Oak Hill Councilors
Nathalie Havard
Head of Investor & Partner Relations
[email protected]


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