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Banks club together to turn their notes green THE AGE, June 22, 2003 A new code of conduct provides stricter guidelines for projects in developing countries. Can banks make money protecting the environment and powerless communities? The world's largest financial institution thinks so, and is trying to use its financial muscle to reduce the damage from dams, power stations, mines and other infrastructure projects. Citigroup and nine other international banks this month adopted the Equator Principles, a code of conduct requiring them to follow standards laid down by the World Bank for infrastructure projects. Led by Chris Beale, an Australian who is Citigroup's head of project finance, the banks have vowed to cut off money to companies that break the rules, including independent studies for the most sensitive projects. The move follows environmental group criticism of banks for harming developing countries by funding destructive development projects. So far, only one Australian bank, Westpac, has signed on. But Mr Beale predicts another six banks will sign up within two months, with 25 signatories in a year. "I would like to see more Australian banks come on board," he said. "Not only is it the right thing to do but there is a business proposition for it." Mr Beale, a protege of World Bank president James Wolfensohn, argues that the rules help projects get approved faster and reduce the damage to banks' reputations when projects go wrong. Citigroup and the other signatories provide about 30 per cent of the financing for the world's infrastructure projects and say they are prepared to withdraw money during construction if the rules are not followed. "We will not provide loans directly to projects where the borrower will not, or is unable to, comply with our environmental and social policies and processes," the principles say. Environmental groups have welcomed the agreement but are cautious about how it will work. "It is going to be really hard for a bank like Citigroup, which is really committed to make the Equator Principles work, when you have to question what these (other) banks' commitment is," Michelle Chan- Fishel, a program manager for Friends of the Earth, said. Among the first tests will be the $A4 billion Camisea natural gas project in Peru, which cuts through the Amazon rainforest. Friends of the Earth and other groups have asked Citigroup to withdraw its support for the two pipelines, wells and processing plant, which are slated to be built in a region with 198 species of bird per hectare, 118 varieties of fish and 152 plant species. The groups say equipment has fallen from helicopters into populated areas, drunk workers have entered isolated communities that had little previous outside contact and some indigenous women have resorted to prostitution. Citigroup points out that it helped the developers respond to the concerns by arranging meetings with local and international groups. The United States and Argentinian developers have agreed to ship in workers and equipment by helicopter, avoiding building damaging roads. They have also agreed to build the gas plant in an area that has already been deforested by farmers. The pipelines will be buried under the ground and covered by trees. Copyright © 2003 The Age Company Ltd |
Official AdoptersABN AMRO Bank N.V. EPFIAbsa Bank Limited EPFI Access Bank EPFI ANZ EPFI Arab African International Bank EPFI ASN Bank NV EPFI Banco Bradesco EPFI Banco de la República Oriental del Uruguay EPFI Banco do Brasil EPFI Banco Galicia EPFI Banco Santander EPFI Bancolombia S.A. EPFI BankMuscat EPFI Bank of America EPFI Bank of Tokyo-Mitsubishi UFJ EPFI Barclays plc EPFI BBVA EPFI BES Group EPFI BMCE Bank EPFI BMO Financial Group EPFI BNP Paribas EPFI Caixa Econτmica Federal EPFI Caja Navarra EPFI Crιdit Agricole Corporate and Investment Bank EPFI CIBC EPFI CIFI EPFI Citigroup Inc. EPFI CORPBANCA EPFI Credit Suisse Group EPFI Dexia Group EPFI DnB Nor EPFI EFIC EPFI EKF EPFI Eksportfinans ASA EPFI Export Development Canada EPFI FirstRand Bank Ltd EPFI FMO EPFI Fortis Bank NV/SA EPFI HSBC Group EPFI Industrial Bank Co., Ltd EPFI ING Group EPFI Intesa Sanpaolo EPFI Itau Unibanco S/A EPFI JPMorgan Chase Associate KBC EPFI KfW IPEX-Bank EPFI la Caixa EPFI Lloyds Banking Group Plc EPFI Manulife EPFI Mizuho Corporate Bank EPFI Millennium bcp EPFI National Australia Bank EPFI Nordea EPFI Nedbank Group EPFI Rabobank Group EPFI RBC EPFI Scotiabank EPFI SEB EPFI Societe Generale EPFI Standard Bank Group EPFI Standard Chartered Bank EPFI SMBC EPFI TD Bank Financial Group EPFI The Royal Bank of Scotland EPFI UniCredit Bank AG EPFI Wells Fargo & Company Associate WestLB AG EPFI Westpac Banking Corporation EPFI Mailing ListClick here to start receiving press releases and other news about the Equator Principles.World Bank/IFC LinksWorld Bank Guidelines and Criteria Referenced in the Equator PrinciplesDevelopment Indicators Database IFC Guidelines and Policies Referenced in the Equator Principles Sector-Specific EHS Guidelines Performance Standards |
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Environmental standards loom ever larger in banks' lending decisions, by Susanne Bergius, ENDS Report, December 2008
60 Second Profile on the Equator Principles, Good Practice Newsletter from ICMM, December 2008
Banks increase their environmental requirements
Promoting Greater Responsibility in Project Financing by Natasha Cappon, Canada, Spring, 2008
China to bring in green loan benchmark, 25 January, 2008
A Question of Principles, Infrastructure Magazine, by Kimberley Gaskin, June 2007
Citigroup to scale up its green spending,The Financial Times, 8 May 2007.
Polluters Clean Up Act to Attract Lenders, The Moscow Times, 12 October 2005
Mizuho To Adopt Environmental Standards In Project Financing, CNNfn, 26 October 2003
Dexia adhθre aux "Equator principles", La Tribune, 22 September 2003 (in French)
Western Banks Set Standards for Eco-Friendly Lending. Japanese Banks Far Behind. NGO Keeping Close Watch, Nikkei, 5 September 2003
Equator Principles Why Indian Banks Too Should be Guided by Them, The Hindu, 25 July 2003
Project finance Standards for Lending, Financial Mail, 25 July 2003
Banks' green pledge earns mixed response, swissinfo, 10 June 2003
Major Banks Endorse Equator Principles, The Peninsula, Qatar, 5 June 2003
Loan rules with an eye on nature, International Herald Tribune, 5 June 2003
IFC Head's Remarks at Equator Principles Press Conference, 4 June 2003