Big victories for indigenous peoples and transparency advocates

10 August 2011 - Oxfam America, Emily Greenspan

Free Prior and Informed Consent is crucial to ensuring that indigenous communities participate in decision-making processes that affect their lands, cultural identity, and livelihoods.  Big wins for the poor sometime come in unlikely venues. This week the International Finance Corporation (IFC)–the private sector lending arm of the World Bank Group–released its new and, in some ways, improved policies designed to protect the environment and communities. The IFC has been criticized for funding high-risk projects in sectors like oil, gas, and mining that entail serious risks for local communities. IFC’s new policies–its so-called “Sustainability Framework”–outline social and environmental requirements for the companies that it funds in order to reduce the risk associated with its projects. Why is this important? IFC’s social and environmental policies have far reaching impact.  Read More.

A Sustainability Framework for International Finance

3 August 2011 - Forbes, Francis Vorhines, Earthmind

The financial press has focused these last days on the raising of the US debt ceiling to avoid a potential default on US government borrowings. With close to 50% of the publically-held US debt now in the hands foreign investors, including the central banks of Brazil, China, Japan and the UK, the deliberations in the US Congress were indeed material to the sustainability of international finance. ... The IFC’s Sustainability Framework – which will become operational in January 2012 – also provides the basis for the Equator Principles which are “a credit risk management framework for determining, assessing and managing environmental and social risk in project finance transactions.” These Principles have been adopted by over 70 financial institutions, such as Citigroup, HSBC and Société Générale, covering over 70% of international project finance debt in developing countries. Read More.

Green banks’ report card

China, 19 July 2011 - chinadialogue, Li Shicong

Green Watershed, a Chinese environmental non-governmental organisation led by Yu Xiaogang, recently released their second annual report ranking 14 Chinese commercial banks on their green performance. The report shows that most banks are making slight progress in green banking compared to last year, but there is still a long way to go before they meet global standards. Because Chinese banks are entering the international market aggressively, attitudes toward sustainability may affect the global environment as well. ....  only one bank, Industrial Bank, is signatory to Equator Principles—a globally accepted framework to evaluate social and environmental risk in project financing, which currently covers over 70% of international project finance debt. “As taking part in Olympics is a sign of world-qualified sports team”, Yu Xiaogang explained to chinadialogue, “Following the Equator Principles is also a sign of international standard banking…the Equator Principles will be essential when Chinese banks compete with other foreign commercial banks”. Read More.

Equator banks to update project finance standards by March 2012

19 July 2011 - Environmental Finance News

A new version of the voluntary Equator Principles, which set environmental and social standards for project finance, is to be published in March 2012. The Equator Principles Association, which governs the application of the principles by 72 banks and financial institutions, said yesterday it is beginning internal discussions on a range of possible changes. Subjects up for discussion include: the scope of the principles, reporting and transparency, governance issues including membership criteria, and stakeholder engagement during the update process. Read More.

Will the Equator Principles soon apply to corporate loans?

16 July 2011 - Norton Rose

The Equator Principles are a set of principles designed to ensure that projects are developed in a socially and environmentally responsible way. Financial institutions can voluntarily agree to adhere to the Equator Principles, and by doing so, agree to apply them to all new project financings with total project capital costs of US $10 million or more. Each financial institution which signs up to the Equator Principles (an EPFI) agrees to report publicly each year on its implementation and experience. Each EPFI interprets and implements the Equator Principles differently, which has led to inconsistent application. As a result, the scope of the Equator Principles may be widened. At present, there is no official sanction for non-compliance with the Equator Principles (other than public de-listing as an EPFI for failure to report annually or non-payment of annual fees). However, if an EPFI invests in projects which are not perceived to be environmentally or socially sound, it can risk significant damage to its reputation. Read More.

Equator Principles: Signatories consider a wider use of rules

London - 15 June 2011 - The Financial Times, Sarah Murray

An oil pipeline project promising everything from employment to ecosystem degradation is the kind of development that, since 2003, has been covered by Equator Principles, the voluntary set of social and environmental standards governing project finance lending. Read More.

Nominees on the Bank of the Year shortlist

London - 15 June 2011 - The Financial Times

These descriptions of institutions nominated for the FT/IFC Sustainable Finance Awards are based on information provided by them ahead of the awards dinner in London. The 2011 Sustainable Bank of the Year award recognises the bank that has shown excellence in creating environmental, social and financial value across its operations. Read More.

Interview: IFC’s Lars Thunell on standards and expansion

London - 15 June 2011 - The Financial Times, Sarah Murray

When in 2006, the International Finance Corporation devised a set of social and environmental standards to govern its lending activities, some said these would limit the IFC’s capacity to expand. With a record $18bn in new investments in 2010, these people “have been proved completely wrong”, says Lars Thunell, the institution’s Swedish-born executive vice-president and chief executive. Read More.

Without uniform, reliable rules, CSR reports will be read with a grain of salt

London - 15 June 2011 - The Financial Times, Mark Wembridge

Over the past decade, the publication of corporate citizenship and social responsibility reports has become an important tool for companies to bolster their reputations. Read More.

FPIC – a Tool for Preventing and Managing Corporate Community Tensions

Asia - 01 June 2011 - CSR Asia, Michelle Brown

On May 11th the International Finance Corporation (IFC’s) board of directors approved the updated Sustainability Framework which had been undergoing an extensive review and consultation process over the last year and a half. The Framework consists of the Performance Standards, the Policy on Social and Environmental Sustainability and the Access to Information Policy.  Read More