How strategic environmental assessment can inform lenders about potential environmental risks

Banhalmi-Zakar, Zsuzsa, and Vammen Larsen, Sanne (2015) How strategic environmental assessment can inform lenders about potential environmental risks. Impact Assessment and Project Appraisal, 33 (1). pp. 68-72.

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Abstract

In this paper, we explore the potential for strategic environmental assessment (SEA) to be a useful tool for banks to manage environmental risks and inform lending decisions. SEA is an environmental assessment tool that was developed to assist strategic-level decision-makers, such as policy-makers, planners, government authorities and environmental practitioners in improving developmental outcomes, aiming to facilitate the transition to sustainable development. We propose that SEA may also be a valuable tool for banks because it has the capacity to provide information about environmental risks at a time when it can be used as an input to bank lending decisions, which can assist banks in making lending decisions with better environmental outcomes. For these reasons, we argue that in some circumstances, and particularly for project finance transactions, SEA may be a more useful environmental assessment tool for lenders than environmental impact assessment, which many banks are currently relying on to help assess and mitigate environmental risks. Furthermore, we suggest that the use of SEA by banks would contribute to the sustainability goals of SEA.

Item ID: 47382
Item Type: Article (Research - C1)
ISSN: 1471-5465
Keywords: environmental risk, strategic environmental assessment, project finance, sustainable development
Date Deposited: 21 Feb 2017 22:21
FoR Codes: 05 ENVIRONMENTAL SCIENCES > 0502 Environmental Science and Management > 050204 Environmental Impact Assessment @ 50%
15 COMMERCE, MANAGEMENT, TOURISM AND SERVICES > 1503 Business and Management > 150303 Corporate Governance and Stakeholder Engagement @ 50%
SEO Codes: 96 ENVIRONMENT > 9606 Environmental and Natural Resource Evaluation > 960601 Economic Incentives for Environmental Protection @ 50%
96 ENVIRONMENT > 9607 Environmental Policy, Legislation and Standards > 960799 Environmental Policy, Legislation and Standards not elsewhere classified @ 50%
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