Week 3 ING

Question 1

There is a decrease in the size of Sustainable Finance due to what 3 reasons?

Answer 1

1. Pandemic, inflation etc.
2. market is maturing
3. regulation / policy is catching up

Question 2

What advantages does Sustainable Finance solutions offer? (6 advantages)

Answer 2

1. Reputation & Marketing –> strengths image
2. External review to improve –> ESG rating, better alignment with market/lender
3. cost advantage –> sustainability discount and energy efficiency
4. create internal alignment –> integrate sustainability in finance department
5. stakeholder interest –> ESG assesment
6. be a leader in sector

Question 3

Name 2 Sustainable finance common products

Answer 3

1. Sustainability-linked financing: linked to improved of clients’ ESG ratings or tailored KPI’s (incentive behaviour)
2. Green financing: linked to sustainable projects with no pricing incentive

Question 4

Name the 5 steps in Green financing

Answer 4

1. Use of proceeds: what is a green purpose?
2. project evaluation and selection
3. management of proceeds: actually spend on green?
4. reporting: annual report, impact report
5. review

Question 5

Name the 5 steps in Sustainability-Linked financing

Answer 5

1. Selection of KPI’s: material to business
2. calibration of sustainability performance targets (SPTs) –> ambitious
3. bond/loan characteristics
4. reporting: about KPIs, SPTs, actual performance
5. verification –> external

Question 6

Name the two types of SLLs

Answer 6

1. KPI-linked: 3-5 ambitious KPI’s covering ESG topics (SMART)
2. ESG rating linked: external rating, target scores –> leads to discount or premium

Question 7

Name the 5 aspects of SMART

Answer 7

S: Specific
M: Measurable
A: Ambitious
R: Realistic
T: Time-dependent

Question 8

Name the 4 SLL steps for ING

Answer 8

1. company research, market research
2. Pitching for a sustainability coordinator role: price negotiation
3. materiality assesment –> KPI’s and target
4. Include KPI’s and targets in the facility agreement: discount or premium