95% of pension funds support alternative credit as an ESG investment option

According to Aeon Investments, 95% of pension funds and other institutional investors believe that alternative credit investments can be used to have positive social and environmental impacts.

As our sister publication reports, European pensionsits survey of institutional investors in Europe and the United States, who collectively hold approximately $574 billion in assets under management, also found that 66% believe that over the next two years, Home lenders will have an ever-closer, ongoing engagement with borrowers throughout life. of the loans they issue, looking at the removal of harmful materials, the monitoring of the achievement of social housing targets and flood risk mitigation strategies, for example.

Seventy-six percent of institutional investors believe that by 2024, real estate lenders will increasingly offer much better terms to projects with exemplary environmental, social and governance (ESG) credentials.

Some 68% of respondents believe that the gap between funding available for real estate projects at either end of the ESG scale is set to widen rapidly.

In his comments, Aeon Investments Managing Director Khalid Khan said, “The structured credit market is fully embracing ESG.

“While there is still a lot of work to be done here, and the industry needs to protect itself against allegations of greenwashing, there is no doubt, for example, that those real estate projects with poor ESG credentials will be increasingly increasingly facing problems accessing finance, resulting in punitive borrowing options and conditions.

“That will trickle down to the structured credit market.”