How does sustainability affect finance for my project?
Brendan Bateman and Nick Thomas, Partners, Environment and Planning
Brendan Bateman
We are now seeing a number financial institutions who have joined together and have set a minimum standard for the environmental assessment of projects that they will fund.
While there are certain thresholds associated with when those principles will be applied, certainly it does set a benchmark for saying, well, we will not provide funding to a particular project if it doesn't meet certain minimum standards of environmental assessment.
So this really does demonstrate, at least to my way of thinking, a commitment from those banks and financial institutions that have signed up to the Equator Principles, that they realise that in terms of investment they have to think long-term and about the overall environmental social responsibilities associated with these projects.
We are really seeing that happen a lot in Asia where the environmental assessment process aren't probably as well refined as those in Australia but certainly there is now this transposing of environmental assessment principles and guidelines to apply to projects.
I think that's something that people investing overseas and particularly in Asia need to consider, not only in terms of the funding. The Equator Principles involve ingoing assessment and reporting of whether or not they're meeting the commitments that they made as part of the project approvals as part of maintaining the funding.
Nick Thomas
Yes, exactly, it's a great example of the private sector considering sustainability as a risk management issue in a number of respects: economically (in terms of the long-term viability of the projects they fund), reputationally, and the environmental consequences of a project and how that might affect the stability of the project and indeed the return to the financiers. It's a great example of the melding of economic and environmental issues.
Brendan Bateman
That's right.
