Banking and finance transactions

Banking and finance and environmental issues

Banks and other commercial lenders must consider environmental, climate change and sustainability issues and risks, both when formulating and applying their lending policy and in the conduct of their business. Lending decisions in relation to large-scale or long-term projects (eg infrastructure or real estate) must take account of factors such as projected climate change impacts and the capital and operational costs arising from new and enhanced regulation.

Lending decisions in relation to corporate and commercial transactions (eg share purchase, mergers or acquisitions) must include adequate assessment of the target's actual or contingent environmental risks and liabilities. These include:

•
potential impact on the value of assets (eg remediation or other clean-up costs)
•
operational risks (eg suspension or revocation of an environmental permit or other necessary licence)
•
reputational risks (eg pollution incidents or perception of poor environmental or sustainability performance adversely affecting share prices)

The interaction of direct and reputational risks, and at least a short-term risk of adverse impact on value, was evident on a large scale following the Deepwater Horizon explosion and oil spill in

To view the latest version of this document and thousands of others like it, sign-in with LexisNexis or register for a free trial.

TAKE A FREE TRIAL

Latest Environment News

Sustainable finance and ESG weekly round–up—21 November 2024

This week's edition of the Sustainable finance and ESG weekly round-up from the Finance Group includes: (1) ICC issues guidance on successful Carbon Pricing, (2) COP29 round up, and (3) ESAs issue ‘Fit-For-55’ climate scenario analysis results.

ECHA updates progress on PFAS restriction proposal evaluation

The European Chemicals Agency (ECHA) has issued a progress update on the evaluation of the per- and polyfluoroalkyl substances (PFAS) restriction proposal. ECHA and five European countries are reviewing over 5,600 comments received during consultation, identifying additional uses for assessment, and considering alternative restriction options beyond a full ban. The agency is evaluating the proportionality of these options for specific sectors, such as batteries and fuel cells, to inform the ongoing scientific committee evaluations.

Environment weekly highlights—21 November 2024

This week's edition of Environment weekly highlights includes: analysis on the consultation on expanding tax conditionality to new sectors, the case of Smallbrook v BCC, considering the tension between proposals seeking to reuse and repurpose buildings and those seeking to demolish and rebuild them and will be of relevance to those involved in regeneration projects which consider the two alternatives, and what businesses need to know about ASA, AI and greenwashing. It also covers developments at the 29th Conference of the Parties of the United Nations Framework Convention on Climate Change (COP29), the Office for Environmental Protection (OEP) and Green Alliance (GA) being granted permission to intervene in the appeal of R (Rights Community Action Ltd) v the Secretary of State for Housing, Communities and Local Government [2024] EWHC 1693 (Admin) and the launch of the Global Clean Power Alliance at G20 summit. In addition this week, the Department for Energy Security and Net zero (DESNZ) has announced of plans to introduce legislation aimed at restricting the future licensing of new coal mines in the UK the Office for Environmental Protection (OEP) has launched an investigation into the legality of the Department for Environment, Food and Rural Affairs (Defra)’s Statutory Guidance on applying the Farming Rules for Water, , the Department of Agriculture, Environment and Rural Affairs (DAERA) Minister, Andrew Muir, has announced an independent review of environmental governance in Northern Ireland, Defra has announced an update on the implementation of the Deposit Return Scheme (DRS) for drinks containers, reaffirming its commitment to launching the DRS across England, Scotland, and Northern Ireland in October 2027 and the Environment Agency (EA) has launched a consultation titled ‘River basin planning: working together 2024’, as the first consultation in the process of reviewing and updating river basin management plans (RBMPs) for 2027.

Prime Minister launches Global Clean Power Alliance at G20 summit

The Prime Minister has launched the Global Clean Power Alliance at the G20 Summit in Rio de Janeiro, Brazil, with 12 countries, including Brazil, Australia, Barbados, Canada, Chile, Colombia, France, Germany, Morocco, Norway, Tanzania, and the African Union, signing up to its inaugural mission. The US and the EU will also partner with the UK on this initiative. The Alliance aims to expedite the global clean energy transition by uniting developed and developing nations to meet COP28 commitments to triple renewable energy and double energy efficiency. It will have ‘Missions’ to address critical energy transition challenges, starting with a ‘Finance Mission’, co-chaired by Brazil, which seeks to unlock private finance for developing countries.