The Sustainable Finance Law Review: USA

In the United States, at the current time a company's decision to engage in sustainable finance is voluntary. Companies consider the reputational and financial benefits for 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, as published by the International Capital Markets 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 federal government has recently introduced rules and regulations specifically related to ESG matters, but until those rules are formalised, existing securities laws will continue to govern sustainable finance.