Wall Street Lends Corporate America ESG Credibility for 0.01%

When American Campus Communities Inc. announced the signing of a $1 billion sustainability-linked credit line in May, its executives decided to take a victory lap.

For the first time, they said, the company was tying its borrowing costs to targets ranging from improved energy efficiency to workforce and boardroom diversity. The largest owner of college apartments in the U.S. even put out a press release touting its commitment to environmental, social and governance goals.

What the statement didn’t say was that the financial incentives embedded in the loan were largely meaningless. American Campus Communities faced no extra cost for failing ...