EVENT DESCRIPTION
Examine how Environmental, Social and Governance (ESG) factors influence risk assessments and credit decisions for private, small and middle-market commercial lenders. ESG factors can affect a company’s ability to service debt obligations but are often overlooked or misinterpreted. Many financial institutions face a disconnect between actions at the individual borrower level and the lender’s own ESG profile, including how to manage messaging to stakeholders. This course ensures that credit professionals will understand the impact sustainability practices can have on a company’s risk profile and on a firm’s disclosure practices when dealing with ESG lending.
ESG for Commercial Lenders considers how climate risks may affect business operations, its physical collateral, and how changes to a borrower’s reputation can impact its supply chain and financial results. The course includes an interactive case study where participants will have the opportunity to analyze a borrowing client and conduct downside sensitivity analysis in Excel using an ESG lens.
KEY TAKEAWAYS:
By the end of this course, participants will be able to:
- Explain why ESG risks should be a material consideration for commercial lenders
- Define how financed emissions influence a lender’s ESG disclosures
- Calculate a borrower’s attribution factor using PCAF Standards
- Explain systems thinking and how it relates to ESG integration and credit risk
- Integrate ESG factors into a financial model and calculate adjusted financial ratios for an example borrower
- Identify trends and future strategies for incorporating ESG into credit risk analysis.
WHO WILL BENEFIT:
Current and aspiring credit professionals, including relationship managers, credit analysts and risk managers looking to improve their understanding and implementation of ESG integration techniques to assess credit risk.