January 2024

Sustainable Finance Law: USA


In the United States, a company's decision to engage in sustainable finance is currently voluntary. Companies are generally free to – and do – consider the reputational and financial benefits of doing a sustainable finance transaction when deciding whether to enter or participate in the market. There are industry guidelines for green, social and sustainable bonds and loans and sustainability-linked bonds (SLBs) and loans (SLLs), as published by the International Capital Market Association (ICMA) and the Loan Syndications and Trading Association (LSTA). While these are just that – guidelines – they are increasingly being viewed in the US sustainable finance market as standards or expectations. In addition to market practices and guidelines, the US federal government has introduced rules and regulations specifically related to ESG matters, but until those rules are formalised, existing securities laws – which tend to focus around disclosure – will continue to govern sustainable finance.

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