ESG in the CLO Context

ESG in the CLO Context

In this video, Mike Peterson explains why ESG must move up the priority list for managers and investors working within the CLO market. He explains why ESG has struggled to gain a foothold among CLO managers and how this can be remedied.
Overview

Environmental, social and governance issues are becoming more important in the CLO market. But this is from a low base. CLO market participants have often argued that ESG is irrelevant to a business that consists of lending to a diverse portfolio of companies. That consensus is now changing, with Europe moving quicker than the US in response to investor pressure. More than 40% of new CLOs issued in 2020 included ESG restrictions of some kind.

Key learning objectives:

  • Why CLOs have been relatively slow to embrace ESG

  • How CLO managers now taking steps to integrate ESG into their policies

  • Which industries are CLO managers choosing to exclude from their portfolios

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Summary
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Expert
Mike Peterson

Mike Peterson

Mike is a financial journalist and he has reported on CLOs since their earliest days. In 2001 Mike founded Creditflux, a trade publication for the credit market. Mike left Creditflux at the start of 2020 and is now an independent investor in media businesses.

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