Jurisdiction(s):
United Kingdom

Project Finance and ESG: A Practitioner’s Guide to Standards, Due Diligence, Documentation, Disclosure and Risk Mitigation

Published by a LexisNexis Banking & Finance expert

Practice notes

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Introduction

Purpose of this Practice Note

This Practice Note maps the principal environmental, social and governance (ESG) considerations influencing project finance transactions. It explores how lenders and sponsors weave ESG standards into due diligence, contractual suites, and oversight after financial close. It also reviews the tightening interplay between soft-law norms and binding regulation, as project finance—once anchored chiefly in financial covenants and risk allocation—now finds its identity equally in its ESG profile. This shift unfolds amid intensifying regulatory focus, investor behaviour and public scrutiny. The aim is to equip practitioners with a clear analytical framework for navigating this evolving discipline.

Relevance of ESG in Project Finance

ESG considerations have grown in prominence in project finance because they shape investment choices, risk management and long-term business sustainability. Investors and financiers apply ESG criteria to assess corporate conduct, anticipate future financial performance, and manage risks, notably around climate change, sustainable financing and green investments. Likewise, ESG factors are becoming integral to regulatory frameworks and industry standards, for example the Equator Principles referenced below. In the UK, the government has introduced initiatives like...

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Oriol Espar

Oriol holds an in-house role of senior legal counsel at the Corporate & Institutional Banking financings team at CaixaBank S.A. since the end of 2015, having worked on a wide range of banking matters, mainly corporate lending, project, asset, and other structured financings, and occasionally leveraged financings and restructurings. Prior to this role he worked as a legal counsel in the Litigation & Dispute Resolution team at CaixaBank from 2012 and previously worked for 8 years as a senior associate at a Spanish firm....

Paul Donnelly

Senior Legal Counsel, CaixaBank

Paul has held an in-house role of senior legal counsel at CaixaBank S.A., UK Branch since the beginning of 2016. Paul has worked on a wide range of banking matters, including acquisition and leveraged finance, investment grade corporate lending, property finance, restructurings and structured financings from previously working as an associate at the London office of Skadden Arps and Nabarro LLP....

Web page updated on 22/05/2026

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