The Need for Better ESG Disclosures in Leveraged Finance
PGIM Fixed Income discusses how a standardised framework can help guide the ESG disclosures that investors in the high yield and leveraged loan market require.
We believe that providing investors with an explicit choice between Traditional and ESG strategies will help them express their policies, views, and beliefs through their investments.
The effect that ESG factors have on credit fundamentals underscores that comprehensive ESG disclosures are no longer a “nice to have.” Rather, they are an investment imperative, as we explain in our blog post titled "A Five-Part Framework for ESG Disclosures in Global Leveraged Finance." While the global investment-grade universe has made notable progress on disclosures, companies in the global leveraged finance universe remain conspicuously behind. Given this delay and the need for standardization, we introduce a five-part framework of tangible steps that leveraged finance companies might reference when attempting to meet investors’ heightened disclosure demands.