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Sustainability and bank lending : assessing ESG-related lender liability

Niels Rogge (UGent)
(2025)
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Abstract
This research examines whether banks under Belgian law have a legal duty to consider environmental, social, and governance (ESG)-related damages caused by their borrowers when granting, maintaining, or terminating credit agreements, and whether failure to do so could result in lender liability. Addressing a gap in Belgian legal doctrine, Part One analyses the current legal framework and finds that while banks are generally not liable for damages caused by their borrowers, exceptions exist if banks are aware of unlawful activities, voluntarily adopt certain soft-law norms, or create perceptions of sustainability they fail to uphold. Part Two assesses emerging European regulations, concluding that although banks face increased obligations to assess and report on ESG risks, these do not currently establish a direct legal basis for lender liability. The study highlights the need for clear binding regulations to effectively align banking practices with the EU's climate neutrality goals by 2050.
Dit onderzoek gaat na of banken onder Belgisch recht de wettelijke plicht hebben om rekening te houden met milieugerelateerde, sociale en governance (ESG)-schade veroorzaakt door hun kredietnemers bij het verstrekken, onderhouden of beëindigen van kredietovereenkomsten, en of het nalaten hiervan kan leiden tot aansprakelijkheid van de kredietverstrekker. Deel één analyseert het huidige Belgisch wettelijke kader en constateert dat banken over het algemeen niet aansprakelijk zijn voor schade veroorzaakt door kredietnemers, maar dat er uitzonderingen bestaan, namelijk wanneer banken op de hoogte zijn van onwettige activiteiten van hun kredietnemer, zich vrijwillig verbinden aan bepaalde soft-law normen, of een perceptie van duurzaamheid creëren die zij niet nakomen. Deel twee van dit onderzoek analyseert opkomende Europese regelgeving en concludeert dat hoewel banken toenemende verplichtingen hebben om ESG-risico's te beoordelen en daarover te rapporteren, deze verplichtingen momenteel geen directe wettelijke basis vormen voor aansprakelijkheid van kredietverstrekkers in het kader van kredietverstrekking. De studie benadrukt de behoefte aan duidelijkere bindende regelgeving om bankpraktijken effectief af te stemmen op de klimaatneutraliteitsdoelstellingen van de EU tegen 2050.
Keywords
Sustainability, Bank, lending, ESG, Lender liability

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MLA
Rogge, Niels. Sustainability and Bank Lending : Assessing ESG-Related Lender Liability. Ghent University. Faculty of Law and Criminology, 2025.
APA
Rogge, N. (2025). Sustainability and bank lending : assessing ESG-related lender liability. Ghent University. Faculty of Law and Criminology, Ghent, Belgium.
Chicago author-date
Rogge, Niels. 2025. “Sustainability and Bank Lending : Assessing ESG-Related Lender Liability.” Ghent, Belgium: Ghent University. Faculty of Law and Criminology.
Chicago author-date (all authors)
Rogge, Niels. 2025. “Sustainability and Bank Lending : Assessing ESG-Related Lender Liability.” Ghent, Belgium: Ghent University. Faculty of Law and Criminology.
Vancouver
1.
Rogge N. Sustainability and bank lending : assessing ESG-related lender liability. [Ghent, Belgium]: Ghent University. Faculty of Law and Criminology; 2025.
IEEE
[1]
N. Rogge, “Sustainability and bank lending : assessing ESG-related lender liability,” Ghent University. Faculty of Law and Criminology, Ghent, Belgium, 2025.
@phdthesis{01JNGB89M7FZ3SH2DHTP6F6PRS,
  abstract     = {{This research examines whether banks under Belgian law have a legal duty to consider environmental, social, and governance (ESG)-related damages caused by their borrowers when granting, maintaining, or terminating credit agreements, and whether failure to do so could result in lender liability. Addressing a gap in Belgian legal doctrine, Part One analyses the current legal framework and finds that while banks are generally not liable for damages caused by their borrowers, exceptions exist if banks are aware of unlawful activities, voluntarily adopt certain soft-law norms, or create perceptions of sustainability they fail to uphold. Part Two assesses emerging European regulations, concluding that although banks face increased obligations to assess and report on ESG risks, these do not currently establish a direct legal basis for lender liability. The study highlights the need for clear binding regulations to effectively align banking practices with the EU's climate neutrality goals by 2050.}},
  author       = {{Rogge, Niels}},
  keywords     = {{Sustainability,Bank,lending,ESG,Lender liability}},
  language     = {{eng}},
  pages        = {{470}},
  publisher    = {{Ghent University. Faculty of Law and Criminology}},
  school       = {{Ghent University}},
  title        = {{Sustainability and bank lending : assessing ESG-related lender liability}},
  year         = {{2025}},
}