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ENVIRONMENTAL AND SOCIAL RISK MANAGEMENT FOR SUSTAINABLE CITIES

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  • 1. ENVIRONMENTAL AND SOCIAL RISK MANAGEMENT FOR SUSTAINABLE CITIES Paris, 14 February 2012www.unepfi.org
  • 2. Context Investing in sustainable cities: yes, but how? 2
  • 3. Concept Environmental and Social Risk Management: a tool for sustainable development ... And sustainable cities. 3
  • 4. Changing Finance to Finance Change Unsustainable Business as usual economic activityBANK LENDING Environmental and Social Risk Gradual shift to Management, sustainable Engagement, and economic activity Financing 4
  • 5. Risk? What Risk? 5
  • 6. What a banker fears –  Diminished pay-back capacity –  Devaluation of guarantees/collateral –  Legal responsibility –  Damage to image and reputation –  Diminished shareholder value 6
  • 7. …and how those fears relate to cities 7
  • 8. •  Project comes to a stand-still [pay-back capacity]•  Contaminated land [devalued collateral]•  Legal action by affected communities [legal risk] 8
  • 9. Início de tour du monde 9
  • 10. Início de tour du monde 10
  • 11. 2003: Creatio n of B anktr ack 11
  • 12. You are being watched •  NGOs •  Import/export markets •  Multilateral Banks •  Regulators •  Investors 12
  • 13. Clean air Clean waterExternalities A thing Stable climate of the Cultural past? Clean Heritage environment 13
  • 14. In short… Protected environnement and society = Protected banks. 14
  • 15. How s a bank to cover itself?20 years of experimentation and mobilisation inenvironmental and social risk management 15
  • 16. We, Members of the Financial Services SectorWe members of the financial services industry recognize thatsustainable development depends upon a positive interactionbetween economic and social development, andenvironmental protection, to balance the interests of this andfuture generations. We further recognize that sustainabledevelopment is the collective responsibility of government,business, and individuals. We are committed to workingcooperatively with these sectors within the framework ofmarket mechanisms toward common environmental goals.UNEP Statement by Financial Institutions on theEnvironment & Sustainable Development 16
  • 17. 2005:
UNEP
FI
launches
training
ac8vi8es
•  More than 2000 risk analysts andother banking professionals trainedby UNEP FI since 2005•  Workshops and online courses•  Available in English, Spanish, French andChinese (coming soon)•  UNEP FI has a team of seven experiencedfacilitators in sustainable finance

 17
  • 18. Início de tour du monde World Bank HQ, Washington D.C. 18
  • 19.   Launched in 2003, the Equator Principles provide for the adoption of principlesof social management to finance new projects. Applies to project finance.  Any new project with total cost equal to or above U.S. $ 10 million should beframed in the rules of the World Bank / IFC ("Performance Standards") Voluntary Agreement
  • 20. 5 key steps –  Identification –  Categorisation –  Analysis –  Mitigation –  Monitoring 20
  • 21. f When managing risk becomes an opportunitytour du mondef Início defffffff Companhia Siderúrgica Nacional (CSN), 2002e 21
  • 22. Contact Careen Abb Banking Commission UNEP Finance Initiative careen.abb@unep.org UNEP Finance Initiative www.unepfi.org 22