Subscription credit facilities have become a standard part of the PE landscape, with little in the way of contention after years of market participants working out terms. With the intense interest and focus on environmental, social and governance (ESG) principles, however, lenders and borrowers have begun to incorporate ESG targets and metrics into facilities, partly to demonstrate their commitment to ESG goals. The result is that the industry has adopted two types of approaches – performance-based and use-of-proceeds – that each weaves ESG into the subscription facility framework. This second article in a two-part series describes the two main facility structures currently in use and certain challenges with linking ESG targets to financing, such as the difficulty of putting an internal ESG program in place and avoiding abuse through greenwashing. The first article outlined the trend generally and how ESG-linked fund financing differs from traditional fund financing, including the role of an ESG coordinator in the negotiation process and requirement of tracking ESG performance. For more on alternative financing facilities, see “How Management Company Facilities Offer Liquidity for Sponsors’ Working Capital Needs” (Apr. 28, 2020); “Streamlined Borrowings and Longer Loan Durations With Hybrid Facilities” (Mar. 3, 2020); and “How GP and Co‑Investment Facilities Increase Sponsors’ ‘Skin in the Game’” (Feb. 11, 2020).