ADFIAP’s Environmental Governance Standards (EGS) project, funded by the European Commission under its Asia Pro Eco Programme, was recently featured in the Australasian UNEP Finance Initiative newsletter, highlighting the greening of development banks in Asia.
Approved in July 2005, the 18-month, Euro 346,446 grant project entails the development and implementation of capacity-building activities and resources on internal environmental management system (IEMS) and environmental rating standard for loan appraisal and project finance (ERS).
The end result of the IEMS is a reference and guidebook to show how this can be done within the organization benchmarked against the best-of-industry practices of European financial institutions. The IEMS indicators will cover nine different aspects, namely, materials, energy, water, solid waste, transport, emissions to air, facility management, green procurement and supply chain management and training.
The ERS aims to develop a set of guidelines and tools that will help lending officers effectively assess environmental risks involved in the granting of credit to project proposals submitted by clients. A ‘decision tree’ for the environmental loan assessment process will be structured along a 5-step process that will consider both economic and environmental relevance, the gaps and overlaps involved as well as other issues and questions. The ERS will also come out with a resource and ‘how-to’ manual using best practices available in Europe.
Main target beneficiaries of the project are the 70 member-institutions of ADFIAP in 35 countries across Asia and the Pacific. Other non-member financial institutions, including commercial banks, have also been invited to attend the scheduled seminars and workshops and to receive knowledge resources developed under the project.