The environment

environmental and social risk

 

CONSIDERATIONS IN FINANCING DECISIONS AND THE IMPLEMENTATION OF THE EQUATOR PRINCIPLES

Nedbank Group was the first African bank to adopt the Equator Principles, which is a set of international guidelines for banks to ensure that the projects they finance are developed in a socially responsible and environmentally sound manner. Detailed information regarding the Equator Principles can be found on the website at www.equatorprinciples.com.

In terms of our commitment to sound environmental management and the enhanced implementation of the Equator Principles, 2008 saw the continued provision of general sustainability and environmental training for our credit committees and our legal, risk transacting and management teams as well as the completion of a third two-day international Equator Principles training workshop for transactors and key support staff.

The consideration of environmental and social risks has been integrated in our credit policies and processes and in our risk management frameworks. Our process in financing projects includes an assessment of the social and environmental impact in terms of the Equator Principles when the initial due diligence is conducted and before the financing proposal is negotiated with the client and other relevant parties.

As the Equator Principles provide a sound framework for managing social and environmental risks and, as our business extends beyond project financing, Nedbank has drafted sector guidelines in respect of certain industry sectors that could potentially be exposed to high environmental or social risks. These sector guidelines are intended to support business by serving as an additional risk management tool. They incorporate principles aligned to the Equator Principles and extend beyond the Equator Principles by in addition providing guidance in respect of additional local and international benchmarks, legislative considerations and best-practice risk management considerations. The sector guidelines were drafted in consultation with WWF-SA and discussed with various Nedbank Capital and Nedbank Corporate representatives in order to create awareness of the guidelines and to also ensure that the guidelines would in fact serve to enhance the risk management processes in practice.

The following is a table including our Equator Principles transactions that have had the initial drawdown during 2008:

[ click on table to view clearer image ]

Key	Category A:	Projects with significant adverse impacts that may affect an area broader than the project site.
	Category B:	Projects with fewer adverse impacts on human populations or environmentally important areas.
	Category C:	Projects with little or no environmental impact.