How strategic environmental assessment can inform lenders about potential environmental risks

Zsuzsa Banhalmi-Zakar, Sanne Vammen Larsen

Research output: Contribution to journalJournal articleResearchpeer-review

4 Citations (Scopus)
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Abstract

In this paper, we explore the potential for strategic environmental assessment (SEA) to be a useful tool for banks to manage environmental risks and inform lending decisions. SEA is an environmental assessment tool that was developed to assist strategic-level decision-makers, such as policy-makers, planners, government authorities and environmental practitioners in improving developmental outcomes, aiming to facilitate the transition to sustainable development. We propose that SEA may also be a valuable tool for banks because it has the capacity to provide information about environmental risks at a time when it can be used as an input to bank lending decisions, which can assist banks in making lending decisions with better environmental outcomes. For these reasons, we argue that in some circumstances, and particularly for project finance transactions, SEA may be a more useful environmental assessment tool for lenders than environmental impact assessment, which many banks are currently relying on to help assess and mitigate environmental risks. Furthermore, we suggest that the use of SEA by banks would contribute to the sustainability goals of SEA.
Translated title of the contributionHvordan strategisk miljøvurdering kan informere långivere om potentielle miljømæssige risici
Original languageEnglish
JournalImpact Assessment and Project Appraisal
Volume33
Issue number1
Pages (from-to)68-72
Number of pages4
ISSN1461-5517
DOIs
Publication statusPublished - 2015

Keywords

    Cite this

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    How strategic environmental assessment can inform lenders about potential environmental risks. / Banhalmi-Zakar, Zsuzsa; Larsen, Sanne Vammen.

    In: Impact Assessment and Project Appraisal, Vol. 33, No. 1, 2015, p. 68-72.

    Research output: Contribution to journalJournal articleResearchpeer-review

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    T1 - How strategic environmental assessment can inform lenders about potential environmental risks

    AU - Banhalmi-Zakar, Zsuzsa

    AU - Larsen, Sanne Vammen

    PY - 2015

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    AB - In this paper, we explore the potential for strategic environmental assessment (SEA) to be a useful tool for banks to manage environmental risks and inform lending decisions. SEA is an environmental assessment tool that was developed to assist strategic-level decision-makers, such as policy-makers, planners, government authorities and environmental practitioners in improving developmental outcomes, aiming to facilitate the transition to sustainable development. We propose that SEA may also be a valuable tool for banks because it has the capacity to provide information about environmental risks at a time when it can be used as an input to bank lending decisions, which can assist banks in making lending decisions with better environmental outcomes. For these reasons, we argue that in some circumstances, and particularly for project finance transactions, SEA may be a more useful environmental assessment tool for lenders than environmental impact assessment, which many banks are currently relying on to help assess and mitigate environmental risks. Furthermore, we suggest that the use of SEA by banks would contribute to the sustainability goals of SEA.

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    KW - project finance

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