EBRD Publishes Public Information Policy

May 15, 2008

The new EBRD Public information policy (PIP) was approved on the 12th May. It sets out how the EBRD discloses information and consults with its stakeholders so as to promote better awareness and understanding of its strategies, policies and operations. At the same time, the PIP establishes clear lines of demarcation to distinguish information which is made publicly available (either on a routine basis or upon request) from information which may not be disclosed on the grounds of being confidential. This is to ensure that mutual trust is maintained between the Bank, its business clients and other partners.

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First bank from the Middle East to adopt the Equator Principles

September 17, 2007

BankMuscat is the first bank from the Middle East region to take this ‘environment-friendly’ stand and adopt the ‘Equator Principles’, a set of globally recognized, voluntary guidelines established to assess and manage social and environmental risk in project financing, especially in the emerging markets (August 18, 2007).

Speaking on the occasion, AbdulRazak Ali Issa, Chief Executive, BankMuscat said:

I am delighted that BankMuscat is the first bank from the Sultanate to join a select and of environment-conscious financial institutions. Environmentalists from across the world have lauded the pristine beauty of our beloved country. Given these lessings, and the vision of His Majesty Sultan Qaboos bin Said, to manage the growth and development of the nation while preserving the natural beauty of Oman, we believe it our duty to take meaningful steps in the same direction.


IFC Guidance to the Private Sector on Indigenous and Tribal Peoples

March 14, 2007

March 13, 2007- The International Finance Corporation (IFC) announced today the release of a new IFC publication, “ILO Convention 169 and the Private Sector: Questions and Answers for IFC Clients.”

The ILO Convention 169 and the Private Sector (PDF, 90kb) publication is intended as a practical guide for IFC clients who operate in countries that have ratified Convention 169 on Indigenous and Tribal Peoples. It is the first guidance of its kind written for the private sector in relation to Convention 169 which is directed at governments. IFC prepared this publication, in close consultation with the ILO, in response to the experiences that IFC has had in recent years with private investments affecting indigenous peoples and their lands in Latin America.

IFC hopes this publication will help to raise awareness about the Convention and its possible implications for private sector companies, and provide added clarity and guidance for IFC clients. The publication should be read in conjunction with IFC’s Performance Standard on Indigenous Peoples.


Key discussions at the Ethical Finance Summit

December 5, 2006

There were some excellent discussions on the Equator Principles (EP) at the Ethical Corporation – Sustainable Finance Summit. The main hot topics were:

  • The need to manage the success of the principles. The need to prevent their extension to areas other than Project Finance weakening the brand, due to insufficient leverage in such areas.
  • The EP’s have lead to an unprecedented level of collaboration by Financial Institutions.
  • There is a lack of mechanisms for demonstrating how the adoption of the EP’s have contributed to business performance and financial benefits, but despite this FI’s are see these issues as key to their core branding.
  • There is a need for a pragmatic approach to their application, in certain situations when good project sponsors and FI’s have turned down projects with high potential environmental and social risks, the projects have been progressed by weaker parties and consequently developed more severe environmental and social problems.
  • There is a need to manage expectations about what the EP’s will achieve – e.g. they have not been established to be a tool for equity.
  • There has been a lack of developing market banks and a notable absence of leading French Banks adopting the EP’s.
  • The need for sufficient lead in times to review Finance deals to avoid situations where problems are picked up too late on a project to enable compliance.
  • Some banks are striving to be leaders in sustainability, while others believe the EP’s have created a level playing field.

The Do’s and Don’ts of Sustainable Banking; a BankTrack manual

December 1, 2006

BankTrack, the NGO network monitoring the private financial sector, presented their new publication, ‘The Do’s and Don’ts of Sustainable Banking; a BankTrack manual’, at the Ethical Corporations’ ‘Sustainable Finance Summit’ in London.

According to Banktrack:
The manual seeks to answer the straightforward question posed to the panel; ‘what does a really sustainable bank look like?’.

  • Banks should, for example, change their bonus schemes to emphasise implementation of environmental and social policy and long-term prudence instead of short-term profits.
  • BankTrack advises banks to ensure that sustainability policies are actually implemented, rather than used as a public relations tool.
  • International banks are told to engage with emerging banks to improve their standards, rather than just complain that there is an uneven playing field.
  • Advising investors to put their money into shares that do not meet the bank’s own minimum standards is also listed as a “don’t” by BankTrack.

It follows the outline of the Collevecchio Declaration, released in 2003, which calls upon financial institutions to embrace six commitments:

  1. Sustainability;
  2. Do No Harm;
  3. Responsibility;
  4. Accountability;
  5. Transparency; and
  6. Sustainable Markets and Governance.

The new manual should be seen as the updated implementation guidelines to the Collevechio Declaration, incorporating the latest thinking and expectations of civil society groups on the subject.


Investment in emerging markets – opportunities for risk management and sustainability

October 2, 2006

Until the last few years, the conventional view towards investing in emerging markets was that sustainability considerations too often appeared subordinate to the quest for economic growth. Emerging markets are now seen by many in the investment community as a place where good rewards can be earned.
EIRIS had just completed a review of the opportunities for responsible investment in emerging markets, which reveals the possibilities for diversification and risk management for investors as well as wider potential gains for sustainability.

The report identifies factors hindering Socially Responsible Investment in emerging markets:

  • perceived lack of consistent and widespread good corporate governance
  • continuing government ownership and control such as with many large listed Asian companies that can be a critically important variable in Environmental and Social Governance performance
  • the retention of large controlling interests by families in many emerging market companies that limit the rights and influences of minority shareholders.
  • even where governance, environmental or labour regulations are strong in some countries, enforcement is sometimes weak.
  • doubts about the honesty of some disclosed information or its credibility. For instance, in relation to ISO14001, the reputation of those providing the certification is crucial for trusting the information disclosed.
  • difficulties in engaging with companies in emerging markets. Although language may be a factor in some cases, the corporate culture of many companies is not yet responsive or attuned to international investors especially relating to environmental and social issues.
  • a limited number of third party organisations in these countries or regions to undertake the research required on companies. The Iinternational Finance Corporation is undertaking initiatives to facilitate and increase this research capacity.

IFC Board Approves new Environmental and Social Standards

March 1, 2006

 

IFC Board Approves new Environmental and Social Standards on February 21, 2006. The Equator Principles are expected to be revised in light of these new standards

Environment & Social Development Department

Washington D.C., February 21, 2006 – The Board of Directors of the International Finance Corporation (IFC) adopted today new environmental and social standards for the organization. The new standards build upon the environmental and social requirements that IFC currently applies to private sector projects it finances in the developing world. A new policy on disclosure, adopted at the same time, will increase transparency requirements.

The main benfits of the new standards are:

1. New requirements for community health, safety, and security; labor conditions; pollution prevention and abatement; integrated social and environmental assessments; and management systems.

2. Stronger requirements for community engagement and consultation; biodiversity protection; community and worker grievance mechanisms; use of security forces; greenhouse gas monitoring; and greater disclosure of information to the public by IFC and client companies.

3. New outcomes-based approach, which requires client companies to have in place effective management systems that allow them to handle social and environmental risks as an integral part of their basic operations and business model.

Lars Thunell, IFC’s Executive Vice President said:

“The new IFC standards are stronger, better, and more comprehensive than those of any other international finance institution working with the private sector. We aim, with these new policies, to increase the development impact of projects in which we invest. We also seek to give companies operating projects in emerging markets the capacity to manage fully their environmental and social risks and to compete better in a global economy.”

In approving the new set of standards, IFC’s Board requested some refinement of the language. Accordingly, the final version of the Performance Standards and Disclosure Policy will be issued as a complete text in the coming weeks. For more information, visit http://www.ifc.org.