Debt Financing Banks and other financial institutions are incorporating ESG risks into their credit risk assessments. Companies with strong ESG ratings often benefit from lower interest rates, longer repayment terms, and more flexible covenants. Bonds and Green Bonds Green bonds and sustainability-linked bonds are emerging financial instruments specifically aimed at financing environmentally friendly projects. These bonds generally carry favorable terms and are more readily accessible to companies with higher ESG ratings. Real-world Impact: The Case of Unilever and Tesla Unilever's commitment to sustainability and social responsibility has made it a darling among ESG-focused investors. This has enabled the company to initiate large sustainability projects and raise capital at favorable terms. Tesla, although plagued by controversies, has revolutionized the electric vehicle market and has strong environmental credentials.