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The Greening of Project Finance
Author(s) -
HadfieldHill Sophie
Publication year - 2007
Publication title -
geography compass
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.587
H-Index - 65
ISSN - 1749-8198
DOI - 10.1111/j.1749-8198.2007.00050.x
Subject(s) - project finance , mainstream , sustainability , order (exchange) , corporate governance , business , civil society , political science , finance , public relations , politics , ecology , law , biology
Over the past decade, financial institutions have become increasingly conscious of the environmental and social implications of their lending decisions. This is due to widespread environmental and social awareness within mainstream society and the rise of sophisticated nongovernmental organisations. Geography provides an insight into a range of issues related to project finance, particularly with regard to human‐environmental relationships, spatial differentiation and modes of governance. The ‘Equator Principles’ are examined focusing on the contribution that ‘Equator banks’ can make to sustainability. With a critical mass of financial institutions now theoretically in compliance with the latest revisions of the guidelines, ‘Equator Principles II,’ environmental decisions can now be made in relation to a common baseline. When conforming to the Principles, banks in theory can make responsible decisions with regard to the environment and society in regions where development projects are under consideration. However, it is essential that financial institutions and civil society collaborate and trust each other in order for both parties to achieve the desired outcomes of responsible lending and sustainable development. It is imperative that geographers expand their understanding of the project finance industry so as to identify the changes occurring within the lending sector and the consequential environmental and social impact.