LEGAL PERSPECTIVE: Green Finance by Dr AbdelGadir Warsama, Legal Counsel

Enjoy
Dr AbdelGadir Warsama, Legal Counsel

Green finance, is having attention of all including Group of 20, who rang the bell to announce the real concern about the risks we are facing due to environmental hazards causing, climate change, pollution, desertification, epidemics and others. Presidents, unanimously called for drastic global steps. They called for steps to face the “emergency situation” we are encountering.

Asia 728x90

Their program of action contains many areas including “Green Finance”. It is a program that needs state-of-the-art and collaboration of all banking and financial institutes. It has been explained that, business culture, needs change to embrace new sense of care towards environment to stop destruction and grave abuses which makes our planet a dangerous risky place. For many years, banks and financing companies were not featured on the environmentalist’s hit lists. However, now NGOs known as “Bank Track” collaborated to tackle environmental concerns. The direct action and dialogue are paying off as banks begin to set what is known as “Green Goals”.

More important is the introduction of new industry standards, as the “Equator Principles” to promote reasonable environmental stewardship and socially responsible development by evaluating the threats or dangers caused by certain projects to forests, oceans, climate, natural habitats, indigenous people …etc. Majority of the global-project-financing signed the Equator Principles.

Inter-marriage between investment and environment needs clear vision and firm strategy. Now, worldwide, extensive environmental-impact assessments are carried out before starting work particularly in projects that could harm the environment. “Bank track” argued that the “Equator Principles” will be seen as catalyst for how banks conduct themselves in other areas of business.

The World Bank & many finance institutions developed a standard procedure not to finance any project nor purchasing any merchandise unless due diligence is taken to ensure that they will not harm or endanger the environment. Many governments, are encouraging banks and companies to go for green investments and as incentive they will cut or wave taxes by giving tax-haven to entities financing projects after taking required necessary measures to preserve environment.   

Moreover, The United Nations is striving hard to achieve this, through the support of the United Nations Environment Program Finance Initiative (UNEP FI) and other agencies, it had successfully launched what is known as the “Principles of Responsible Investment” (PRI), which is to be considered as the first broadly defined effort to unify investors on a global basis around the environmental, social and governance principles that legitimize sustainable and responsible investment.

Print Friendly, PDF & Email