Multilateral development banks (MDBs) are increasingly expected to address environmental
issues in their economic development lending. Yet the banks have been accused of failing to implement their own environmental policies, thereby contributing to environmental degradation in borrowing countries. In this book Tamar Gutner analyzes the environmental policies of three MDBs: the World Bank, the European Bank for Reconstruction and Development, and the European Investment Bank. She compares their performance in Central and Eastern Europe, where the need for economic and environmental reform has been particularly urgent, and where these MDBs are among the largest donors.Gutner finds many obstacles to efforts to "green" the three banks, most notably a mismatch between the environmental mandates and existing patterns of institutional design and incentives. The depth and scope of the banks’ green activities reflect the degree of shareholder commitment to environmental issues and how demand-driven the MDB is designed to be. Surprisingly, the World Bank, the most scrutinized and criticized of the three MDBs, has been rather more responsive than its counterparts to its environmental mandate in the region.The discussion is framed by larger explorations of the behavior of international organizations and the sources of their innovation and inertia in addressing new policy issues. Gutner demonstrates the need to examine the impact of different stages of the policy process on new mandates and to incorporate both political and institutional variables when developing theories about the behavior of international institutions.
Environmental sustainability is a key part of banks’ social responsibility efforts. Banks
have established environmental policies, goals and practices that help guide their activities inside and out. Environmentally-oriented thinking is incorporated into a range of bank operations, lending, products and services and community activities.
Banks’ activities range from participation in conservation initiatives in communities
across the country, to commitments to well-recognized domestic and international standards and reporting agreements. In fact, the five largest banks and others have committed to the Equator Principles — an international benchmark for social and environmental issues in project financing, and several banks in have been recognized for their achievements in the environmental field. The terms and conditions that effects of loans and deposits: After formulating a policy and implementing it, the board may realize that there are some shortcomings that may be affecting performance of certain loan products. These are issues that can be adjusted by making changes to the existing loan policy. There are also other cases that may necessitate such adjustments including: Existence of multiple underwritings Change of directors or officers listed in the policy Omission or change of identified trade areas Discontinuation or introduction of products Introduction of new regulations Generally, loan policy formulation is an involving process with numerous variables that need to be factored in. This is also critical since making the wrong decisions can easily affect the bank’s performance.