Why ESG Considerations Have Become Increasingly Important

With almost 20 years of experience in fund financing legislation, Attorney Zac Barnett is a leading lawyer and one of the industry pioneers. Zac Barnett is the attorney at Fund Finance Partners, an asset management company focusing on global trends in the industry and leading standards to improve client growth. One of the increasingly crucial aspects of investment and middle-market company growth via financing are ESG (environmental, social, and governance) considerations and company policies.

ESG screening is a strategy used by companies and their investors to determine long-term potential. This practice is driven by recent shifts in how fund financing methodologies have changed to encompass impact-based investing rather than traditional ramifications and expectations. Middle-market and large businesses have likely already had contact with various ESG requirements and policies through their capital investors, especially if they have contact with the European Union market due to their earlier prevalence of such policies.

Business management and finance teams must pay close attention to align their company values with investors’ expectations, particularly regarding ESG considerations and requirements, to access better and more streamlined funding opportunities. Most asset managers are still evaluating the effect changes from traditional to ESG-based investment have on market values and funding methods. However, it’s evident there’s no time to waste if a company wants to stay ahead and gather capital in a new paradigm.