Access to funds is an essential part of all business operations and this is no different when funding your ESG projects. Recently, there has been an increase in financial opportunities for those who can demonstrate their organisation’s sustainability efforts. We have written about how an SRS Report has helped housing associations gain access to ESG funds in the past. In this article, we will discuss the wider range of sustainable financing options available and what you can do to access them.
What Is Sustainable Financing?
Sustainable financing may sound like it is about long term, low-risk financial planning but it often refers to funds exclusively for sustainable ESG efforts. This is usually issued from a bank, investor or corporation intent on improving their ESG Score.
What Sustainable Financing Options Are There?
The majority of sustainable financing comes from “use of proceeds” bonds which means the money is dedicated to a specific project. There are a wide range of bonds available for ESG, the most prominent being Green Bonds. These are issued from a variety of major corporate lenders including the World Bank.
Green Bonds and their other ESG counterparts, Social, and Sustainability Bonds all need to meet the relevant Principles set out for them by the International Capital Market Association (ICMA).
There are also Sustainably-Linked Bonds which require you to meet annual targets in order to not incur a penalty. This would require agreeing upon a set of ESG KPIs with your bond provider before being approved.
Both of these methods highlight the importance of a strong ESG plan and annual ESG Reports.
What Is An ESG Plan?
An ESG plan details your organisation’s efforts and sets out a corporate culture for ESG amongst your employees. Your Chief Sustainability Officer should publish a set of ESG Criteria to focus on and a detailed memo on corporate culture.
What is in your ESG plan is dependent on your organisation but we have written in the past about what makes an ESG plan successful. Read more about this here.
What Is An ESG Report?
An ESG Report should be published annually to allow you to be on the radar of potential investors. There are some industries that have a sector-wide approach to publishing ESG Reports, such as the Housing Association’s Sustainability Reporting Standard.
Your ESG Report should include your ESG Plan, but also what your current ESG KPIs are alongside evidence both qualitative and quantifiable. Consider including testimonies from projects you are involved in. We have written a detailed article on what an SRS Report should look like, which is not too dissimilar to an ESG Report.
How Can Convene Help You?
Convene ESG is designed to streamline your ESG reporting processes.
With Convene ESG you can compare benchmarks, organise your report, assign sections, automate reminders and input your ESG data and the solution will create a word document ready to publish or edit as necessary!
We are currently working to develop Convene ESG to include as many standards as possible, but are already fully operational for the SRS, TCFD and GRI. Please do not hesitate to contact us regarding your organisation’s relevant standards!