EBAA working to improve approaches taken by financial institutions
Environmental Bankers Association of Australasia working to improve approaches taken by financial institutions
The Environmental Bankers Association of Australasia (EBAA), representing those within the banking and finance sectors who address issues regarding environmental risk and sustainability, is working to improve the sector approaches to managing the environmental and financial risks posed by some industries.
As the carbon pricing debate in Australia enters a critical phase, the EBAA’s newly formed Risk Committee, which includes representatives from NAB, ANZ, GE Capital, Minter Ellison and OTEK Australia, is considering the key risks facing financial institutions in relation to how they address environmental issues when financing high risk or sensitive industries.
The EBAA’s Risk Committee determined that there was a significant need for the finance industry to work together with its peers, and environmental experts, to help establish an effective financing framework that will deliver benefits for those companies in high risk sectors, for the environment and for the financial institutions themselves. The EBAA Risk Committee went on to identify the four most important risks to address as Credit Risk, Property Risk, Regulatory Risk and Compliance Risk.
Nicole Bradford, Environmental Risk Programs Leader GE Capital and Chairperson of the EBAA Risk Committee, stated, “The EBAA’s Risk Committee has been established to ensure members can learn from the most effective approaches and latest developments in the dynamic environmental risk management and legislative space, to enable them to positively impact their risk profile and that of their clients.”
A major issue facing the finance industry at the moment is how to deal with the risks surrounding important, but often sensitive, industry sectors. One of the first priorities for the EBAA Risk Committee is to provide straight-forward, practical guidance for EBAA Members on how financial institutions can best assist clients in these sensitive industries, while still managing their own risks.
A series of EBAA information sheets and other educational materials are being prepared and seminars are planned for later in the year. The seminar program will be available to both EBAA members and non-members to assist the finance industry in improving its approach to managing risks.
The EBAA has an independent advisory panel headed by Dr Paul Vogel, Chairman of the Environmental Protection Authority Western Australia. Vogel said, “As regulators, we welcome the opportunity the EBAA presents to discuss issues with the finance industry to help achieve better outcomes for the environment and the community, as well as industry and financial institutions.”
Glenn Thiele, Chief Technical Officer of leading environmental remediation consultancy firm OTEK, commented on the tangible way the EBAA supports the industry, saying, “The mix of leading financial institutions such as ANZ, GE Capital and NAB, with expert input from other relevant industries, creates a powerful force to develop industry guidance and provide training that challenges existing practices. Our focus is to develop the best practical approach to how the finance sector can assess and manage emerging issues during transactions, such as a pricing mechanism for carbon.”
Grant Scott, CEO of the EBAA summed up the Association’s relevance by adding, “The EBAA has no lobbying objectives but works with the sector to provide practical assistance to the banking, financial and associated entities’ environmental projects and policies. The advisory panel in particular provides an environment for finance companies to get a deeper understanding of the expectations set by different regulatory regimes in the region.”
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