This is an update of an article originally published on 5 June 2023 as part of our publication "Securitisation markets and regulation: choosing different paths?", accessible here.

Environmental, social and governance (“ESG”) factors have become a permanent fixture of the financial markets in recent years. Investors globally are recognising the benefit in incorporating sustainability and responsible decision-making into their investment frameworks. ESG securitisation was slower off the mark than other forms of ESG finance, but has gained momentum in recent years.

This article will explore the key challenges and opportunities for originators, arrangers and investors seeking to incorporate ESG factors in securitisation. It will look at recent regulatory and market trends and consider the future direction of travel for ESG securitisation.

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