IntroductionPurpose of this Practice NoteThis Practice Note outlines the main environmental, social and governance (ESG) considerations affecting project finance transactions. It examines how lenders and sponsors integrate ESG standards into due diligence, contractual documentation, and post-financial-close monitoring. It also considers the growing convergence between soft-law principles and binding regulatory requirements as project finance, long governed by financial covenants and risk allocation mechanisms, is now equally defined by its ESG profile. This growth is set in an environment in which ESG factors are increasingly driving regulatory attention, investor behaviour and public scrutiny.The purpose of this Practice Note is to provide a clear analytical framework for practitioners navigating this evolving discipline.Relevance of ESG in Project FinanceThe consideration of ESG factors in project finance has increasingly become significant as such factors influence investment decisions, risk management and long-term business sustainability. Investors and financiers use ESG criteria to assess corporate behaviour, predict future financial performance, and manage risks, particularly in the context of climate change, sustainable financing, and