Impact intensity of profits and Impaired agent: Difference between pages

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''Sustainability - impact reporting''.
''Borrowing and lending - documentation - finance party default.''


Impact intensity of profits measures the relationship between a company's profits and its most important positive - or negative - effect on ESG issues.
The concept of an impaired agent bank is an element of borrowing and lending agreements, designed for the protection of the borrower and other lenders under the agreement.


The relevant detailed measure of ESG effect will differ, according to the business.
It includes situations in which the agent bank fails to honour its commitment to make a payment under borrowing documentation, becomes insolvent, or is a defaulting lender.




:<span style="color:#4B0082">'''''Impact intensity of profits must becoming guiding framework'''''</span>
When an agent becomes an impaired agent under the borrowing documentation, the borrower and majority lenders enjoy additional rights to protect their positions.


:"For the power company Enel, the primary issue is the environmental impact of its operational footprint, which means the company should make investment decisions that optimize profit per tons of CO2 emitted.


:For Nestlé, the primary concerns are the nutritional value of its products and the ESG effects of sourcing from smallholders.  
Impaired agent provisions are a part of ''Lehman provisions''.


:The company might optimize profit generated per micrograms of nutritional value in its products and the cost of raw materials relative to farmer income and environmental impact in its sourcing...


:<span style="color:#4B0082">'''''Impaired agent provisions widely used'''''</span>


:The mathematical relationship between changes in environmental or social factors and the resulting changes in profit must become the guiding framework for decision-making at all levels within the company.  
:"These provisions [are widely] used and available in a version suitable for swingline facilities."


:The results are likely to lead to significantly different choices that not only improve ESG performance but also help reposition the company in ways that improve financial performance."
:''The ACT Borrower’s Guide to the LMA’s Investment Grade Agreements - 6th edition - 2022 - p380.''
 
:''Harvard Business Review - The Essential Link Between ESG Targets & Financial Performance - Mark R Kramer & Marc W Pfitzer - September 2022.''




== See also ==
== See also ==
* [[Business impact analysis]]
* [[Agent bank]]
* [[Capital intensity]]
* [[Arranger]]
* [[Carbon intensity]]
* [[Default]]
* [[Environmental impact]]
* [[Defaulting lender]]
* [[Environmental Impact Assessment]] (EIA)
* [[Documentation]]
* [[EP&L intensity]]
* [[Event of default]]
* [[ESG]]
* [[Finance party default]]
* [[Impact]]
* [[Investment Grade Agreements]]
* [[Impact accounting]]
* [[Lehman provisions]]
* [[Impact investing]]
* [[Loan agreement]]
* [[Impact reporting]]
* [[Loan Market Association]] (LMA)
* [[Impact Taskforce]]
* [[Syndicate]]
* [[Impact-weighted accounts]]
* [[Intensity]]
* [[Sustainability]]
* [[Total Societal Impact]]
* [[Value Reporting Foundation]] (VRF)




==External link==
==Other resource==


*[https://hbr.org/2022/09/the-essential-link-between-esg-targets-financial-performance#:~:text=The%20%E2%80%9Cimpact%20intensity%20of%20profits,negative%20effect%20on%20ESG%20issues. Harvard Business Review - The Essential Link Between ESG Targets & Financial Performance - Mark R Kramer & Marc W Pfitzer - September 2022]
* [https://www.treasurers.org/best-practice/borrowers-guide-LMA-investment-grade-agreements The ACT Borrower’s Guide to the LMA’s Investment Grade Agreements - 2022 - p379-380]


[[Category:Accounting,_tax_and_regulation]]
[[Category:Accounting,_tax_and_regulation]]
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[[Category:Corporate_finance]]
[[Category:Corporate_finance]]
[[Category:Investment]]
[[Category:Investment]]
[[Category:Compliance_and_audit]]
[[Category:Long_term_funding]]
[[Category:Ethics]]
[[Category:Identify_and_assess_risks]]
[[Category:Identify_and_assess_risks]]
[[Category:Manage_risks]]
[[Category:Manage_risks]]
[[Category:Risk_frameworks]]
[[Category:Risk_frameworks]]
[[Category:Risk_reporting]]
[[Category:Risk_reporting]]
[[Category:Cash_management]]
[[Category:Financial_products_and_markets]]
[[Category:Liquidity_management]]

Latest revision as of 16:42, 25 November 2022

Borrowing and lending - documentation - finance party default.

The concept of an impaired agent bank is an element of borrowing and lending agreements, designed for the protection of the borrower and other lenders under the agreement.

It includes situations in which the agent bank fails to honour its commitment to make a payment under borrowing documentation, becomes insolvent, or is a defaulting lender.


When an agent becomes an impaired agent under the borrowing documentation, the borrower and majority lenders enjoy additional rights to protect their positions.


Impaired agent provisions are a part of Lehman provisions.


Impaired agent provisions widely used
"These provisions [are widely] used and available in a version suitable for swingline facilities."
The ACT Borrower’s Guide to the LMA’s Investment Grade Agreements - 6th edition - 2022 - p380.


See also


Other resource

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