The Evolution of ESG Credit at Apollo (Volume II): Driving Value Creation at Scale

The whitepaper builds on Apollo’s longstanding commitment to transparency and expertise in credit strategies by providing an in-depth look into how the Apollo ESG credit platform has significantly scaled to support a range of strategies and innovative transactions. 

As of September 2024, the ESG Credit Team is known as the Sustainable Credit & Platforms Team and ESG Risk Ratings are known as ESG Risk Assessments.

Joseph Moroney | Partner, Head of Sustainable Finance & Co-Head of Global Corporate Credit, Secondary Author
Michael Kashani | Managing Director, Head of ESG Credit, Primary Author
Lori Shapiro | Director, Senior Stewardship and Engagement Specialist, Primary Author
Amanda Gray | Principal, Senior ESG Research Analyst, Secondary Author
Edward Brierley | Associate Director, ESG Research Analyst, Secondary Author
Ashley Yen | Associate, Stewardship and Engagement Specialist, Secondary Author
Sanchita Utekar| Analyst, ESG Research Analyst, Secondary Author

Today, Apollo published Volume Two of its ESG Credit Whitepaper: “The Evolution of ESG Credit at Apollo: Driving Value Creation at Scale.”

We believe that a credible environmental, social, and governance (ESG) platform is rooted in the fundamental investment process, aligned with Apollo’s investment philosophy and fiduciary obligations of driving value creation and responding to diverse stakeholder needs. Accordingly, we have built a platform that empowers all investment professionals, not only those with ESG and sustainability in their title. Our integrated platform enables investment team collaboration with a dedicated ESG team to identify applicable risks and assess emerging opportunities.

The whitepaper builds on Apollo’s longstanding commitment to transparency and expertise in credit strategies by providing an in-depth look into how the Apollo ESG credit platform has significantly scaled to support a range of strategies and innovative transactions. Key takeaways include:

• Since the publication of our inaugural ESG Credit Whitepaper, the Apollo ESG Credit Team has significantly scaled coverage and support of teams and strategies across Apollo and many of its origination platforms. This scale has been achieved by adapting existing frameworks and expanding our partnership with additional teams across the firm and our platforms.
• Apollo’s ESG Risk Rating framework is robust and scalable in its assessment process, designed to capture material ESG issues to investments. In addition to corporate, infrastructure, aviation, credit real estate, and sovereign holdings, Apollo’s ESG Risk Rating is now also being utilized for many asset-backed finance deals and a broader set of real estate transactions, as well as across Apollo’s AAA and S3 Platforms.
• With enhanced ESG due diligence, Apollo’s investment teams are equipped to assess an issuer’s ESG strategy, performance, risks, and opportunities at an early stage in the investment life cycle. In 2023, we evolved our ESG due diligence process to have greater relevance across a wider variety of sectors, teams, and investment disciplines, underscoring the flexibility of our framework.
• We believe that the credit markets in which Apollo participates can play a meaningful role in encouraging change in issuer disclosure, behavior, and decision-making, thereby driving value creation. In 2023, Apollo’s ESG Credit Team established four key engagement pillars: transparency and disclosure, thematic engagement, financing the energy transition, and value creation.
• Apollo remains steadfast in our commitment to utilize our deep experience to provide capital solutions that can drive the transition to a more sustainable future and expand opportunities for companies and communities. Apollo’s credit platform led on a number of opportunities and introduced innovative financing structures in 2023 that helped contribute towards Apollo’s climate and transition financing targets.
• Apollo remains committed to participating in initiatives that aim to advance ESG integration across the private credit markets and support our clients' reporting needs. This is demonstrated by Apollo’s work as the inaugural chair of the ESG Integrated Disclosure Project (“ESG IDP”), a private credit initiative which continues to gain momentum and receive support from a growing number of financial market participants.
• As part of our longstanding commitment to transparency, Apollo’s credit business continues to expand the scope of reporting, leveraging both internal and external data to generate periodic ESG reporting for an increasing number of Apollo-managed funds and accounts.