CLOs Set for Rapid ESG Growth on Climate Push, Investor Pull
- U.S. follows Europe, where sustainable CLOs are taking off
- Progress has been slowed by lack on data on underlying loans
This article is for subscribers only.
Investors are dragging collateralized loan obligations into the sustainable finance revolution.
Citigroup Inc. says 20%-40% of U.S. CLO managers will incorporate environmental, social and governance factors into new issue CLOs in the next two years, propelled by growing demand from buyers and President Joe Biden’s climate agenda. That’s up from 11% last year and just 3% in 2019, according to estimates from Citi analysts led by Maggie Wang.