The mechanism of ESG-linked loans incentivises firms to invest in sustainable development by rewarding their performance in this area with favourable loan pricing, and penalising them with higher margins if they fail to meet the ESG objectives.
The companies’ obligations resulting from ESG financing related to sustainable development are analysed and evaluated by independent analytical agencies. The results of annual audits are the basis for banks to assess pricing to be applied for the borrower.
In the case of the agreement with Energa, the ESG auditor will be Vigeo Eiris, an international rating agency from the Moody’s group, specialising in the assessment of the integration of social, environmental and governance factors in companies around the world.
The agreement was signed in a syndicate with four other banks: CaixaBank, MUFG Bank, PKO BP and BGK.
Santander Bank Polska acts as a coordinator, agent and ESG agent in this transaction.