Financial Firms Set Example With Penalties for Missed ESG Goals

The financial industry is putting its money where its mouth is by increasingly signing up for borrowing penalties for missed sustainability goals, after years of pushing clients to do so.

BlackRock Inc., Carlyle Group Inc., and Turkiye Garanti Bankasi A.S. are among firms that have so far this year borrowed $38 billion of loans with terms tied to environmental, social and governance criteria. That puts financial companies ahead of utilities as the most active sustainability-linked loan borrowers for the first time.

In the bond market, UBS Group AG is planning a debut green issue this year and Banco Bilbao Vizcaya ...