This Round-table Meeting on Finance and the Environment, third in a series organized by UNEP, will also explore the challenges the financial services sector faces in translating corporate environmental information into financially relevant terms for use by financial analysts.
Participants represent a wide range of financial institutions: investment banks such as Salomon Inc. and Smith Barney, commercial banks including Bank of America and Royal Bank of Canada, as well as Europe-based banks such as NatWest, HSBC Holdings Plc, Swiss Bank Corporation and UBS (Union Bank of Switzerland).
"The financial services industry has come a long way since we launched this initiative five years ago. The private sector is now ready to pursue and grasp environmental opportunities in investment and lending practices. The incorporation of environmental facts and figures into investment is key to sustainable development", says Ms. Elizabeth Dowdeswell, Executive Director of UNEP.
Since its launch in 1992 UNEP's Statement by Banks on the Environment and Sustainable Development has been signed by 93 banks from 33 countries. At a signing ceremony and reception tomorrow evening, a number of banks, including Econatsbanks of Russia, are due to sign the Statement.
"The meeting reflects a growing awareness within our industry that the environment is a strategic business issue to many of the industries we're involved with", says Linda Descano, Vice-President of Environmental Affairs, Salomon Inc. and a member of the U.S. Environmental Protection Agency's Environmental Financial Advisory Board. "A better understanding of those issues and their influence on corporate performance, profitability and growth is fundamental to our delivery of high quality advisory services in transactions or acquisitions."
In a discussion of "Environmental Opportunities and Issues in Private Finance", the meeting will look at three industries which are currently receiving considerable attention from both the financial and environmental communities because of the scale of the investment opportunities and the environmental implications: energy, water and forestry. Representatives from the three sectors with experience in financing arrangements will describe how environmental factors influenced deals - positively and negatively.
Historically, the financial community has focused on environmental risks in lending, but over the past 12-18 months there has been significant attention paid as well to the areas of investment and insurance services.
Another interesting item on the agenda is "Environmental Disclosures and Reporting". In respect to the status of environmental accounting and disclosure requirements, apparently standards are being developed in Europe, and particularly the United Kingdom, while in the United States a banker would be hard pressed to find anyone to speak with at the US Securities and Exchange Commission to discuss the matter. Perspectives from three parts of the world - Europe, North America and Australia - will be considered from a legal and regulatory point of view, that is to say, where things are and where they are going.
"We will only gain public confidence when we can show what we have achieved", says Otti Bisang, head of Environmental Management Services at Credit Suisse. "We are convinced that our ISO 14000 certification is just an external confirmation that we are doing the right things in the right way. This meeting offers a good opportunity to share best practice and develop common language in moving forward."
At a session devoted to "Opportunities for Green Investment", the point will be made that the global market for investment in the environment continues to grow at an impressive rate. Immense opportunities exist for proactive financiers. It is estimated that by the year 2000 the market for pollution control will be $300 to $600 billion, rivalling the pharmaceuticals industry. Among the areas for environmental lending and investment are eco- tourism, clean technologies and protected areas.
Because "natural" disasters occur so frequently, the most recent being the cyclone in Bangladesh, the insurance industry is on the front line. One session will therefore explore how insurance companies are responding to windstorms, floods, droughts and fires which have proved costly to the industry.
The insurance industry represents a significant part of the world's capital base for investments and risk management. UNEP's Statement of Environmental Commitment for the Insurance Industry was launched in 1995 and has since been signed by 67 insurance companies in 23 countries. SOREMA of Canada will add its name to the list at the meeting.
The meeting will also address crucial issues such as innovative policy initiatives for various industry sectors, the World Bank Guidelines, the ISO 14001 Standard, Brazil's Green Protocol Programme, and challenges in relating environmental performance to financial performance.
Speakers will come from a broad spectrum of institutions, such as The World Bank Group, CalPERS, the New York Pension Fund, and non-governmental organizations such as the U.S. National Wildlife Federation, and large industrial firms, among them Sony and British Petroleum.
For more information, please contact:
Hussein Abaza, Chief,
or Deborah Vorhies,
UNEP Economics, Trade and Environment Unit, Geneva,
or Patricia Jacobs, Associate Information Officer, United Nations Environment Programme,
P.O. Box 30552, Nairobi, Kenya;
tel: 254-2-62-3088, fax: 254-2-623692,
UNEP News Release 1997/20