Credit from banking institutions is a dominant source of finance globally for corporations.  While consideration of environmental, social and governance (ESG) issues has long been common practice in the context of project finance transactions it has been far more limited in the context of general corporate lending, which represent the vast majority of debt transactions for most banks.  The OECD Due Diligence for Responsible Corporate Lending and Securities Underwriting represents the first guidance for environmental and social risk management in the context of general corporate lending and securities underwriting.  OECD due diligence recommendations have been embedded in central banks supervisory guidance and taxomony regulations as a tool to manage environmental and social risks.

OECD due diligence for responsible business conduct aligns with existing environmental and social risk management practices for project and asset finance. It further expands on existing frameworks by setting our expectations for lenders with respect to stakeholder engagement, reporting and remediation in the context of their project and asset finance transactions.   In this way impacts associated with projects with large environmental and social impacts can better be avoided or remedied where they do arise.