ESG for Commercial Lenders Course Overview
This course examines how ESG factors may influence risk assessments and credit decisions for private, small, and middle-market commercial lenders. Environmental, social, and governance factors can affect a company’s ability to service debt obligations but are often overlooked or misinterpreted. Further, many financial institutions face a disconnect between actions at the individual borrower level and the lender’s own ESG profile, including how to manage messaging to stakeholders. This course ensures that credit professionals will be equipped to understand the impact that sustainability practices, or a lack thereof, can have on a company’s risk profile and, ultimately, on a firm’s disclosure practices.
ESG for Commercial Lenders looks at topics like how climate risks may affect business operations as well as its physical collateral and how changes to a borrower’s reputation can impact its supply chain and its financial results. The course includes an interactive case study where we will have the opportunity to analyze a borrowing client and conduct downside sensitivity analysis in Excel using an ESG lens.
ESG for Commercial Lenders Learning Objectives
Upon completing this course, you will be able to:
- Explain why ESG risks should be a material consideration for commercial lenders
- Define how financed emissions influence a lender’s ESG disclosures
- Calculate a borrower’s attribution factor using PCAF Standards
- Explain systems thinking and how it relates to ESG integration & credit risk
- Integrate ESG factors into a financial model and calculate adjusted financial ratios for an example borrower
- Identify trends and future strategies for incorporating ESG into credit risk analysis
ESG for Commercial Lenders is an Elective Course of CFI’s CBCA® Program
CFI’s Commercial Banking & Credit Analyst (CBCA)™ Program offers skills including credit evaluation, documentation, and review procedures. From beginners to advanced users, the CBCA® program is designed to help you become a world-class commercial banker or credit analyst.
Who Should Take This CBCA® Course?
This ESG for Commercial Lenders Course is highly recommended for current and aspiring credit professionals, including relationship managers, credit analysts, and risk managers. Every company faces ESG challenges, so lenders must improve their understanding of and their implementation of ESG integration techniques to more holistically assess credit risk.