INVESTMENT ACTIONS

ESG moves centre stage

01-Dec-2020
  • BlackRock

As sustainability moves up the agenda, private debt funds have an important role to play in helping build a collective approach to ESG issues from institutional investor level through to portfolio company practices, says BlackRock’s Sonia Rocher.

A Q&A with Sonia Rocher

If environmental, social and governance issues were already on the radar of many private credit funds, their investors and portfolio companies, 2020 looks set to be the year that accelerates the integration of sustainable investment and business practices.

But what does ESG integration mean in the context of private debt? And how much leverage does a lender really have with management teams when it comes to encouraging sustainability? We explored these and other issues with Sonia Rocher, managing director in BlackRock’s European private credit group.

  1. Why are ESG factors becoming more important for corporates seeking access to capital?

We’ve seen a lot of change over the past few years as lenders and investors have been gathering data and monitoring borrowers through more of a sustainability lens. This development has been happening quite rapidly in private credit, but we’re also seeing it across the liquid credit markets, including in areas such as high-yield bonds and leveraged loans.

Overall, there is a much greater awareness and understanding of how capital can be directed towards the sustainability agenda. For example, we take a long-term view on companies and why they will be winners – ESG and sustainability factors play strongly into this. As an investor, you want to be sure you are backing companies with a sustainable business model and that holds true across private credit, private equity, public equities and fixed income. That means companies increasingly need to demonstrate their ESG credentials and especially their readiness for climate transition to be successful in capital-raising.

To read the full Q&A, as featured in Private Debt Investor, click the link below.

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Sonia Rocher
Managing Director, Middle Market Private Debt

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