Leading international standards

Although we require business clients to meet our comprehensive Environmental & Social (E&S) criteria, we are also aware that some clients will not meet all of our requirements all of the time. This may be due to operational issues outside of anyone’s control, or due to changes we’ve made which a client will need time to implement – such as requiring clients to become a member of an industry body or get certain certifications. 

When this happens, we will always engage our clients to inform them about changes to our criteria and if necessary agree a specific, time-bound action plan to address any issues. But if it becomes clear that a client is unable or unwilling to meet our requirements, we will end the relationship subject to contractual obligations.

We believe in working with our clients to raise their performance in relation to E&S issues.  We follow the Precautionary Principle, which underpins many international agreements, and expect our clients to do the same: “Where there are threats of serious or irreversible damage, lack of full scientific certainty shall not be used as a reason for postponing cost-effective measures to prevent environmental degradation.”

We embed our framework directly into our credit approvals process. 

Before we provide financial services to a Corporate or Commercial Banking client, our relationship managers carry out an Environmental & Social Risk Assessment (Client ESRA). This allows us to evaluate their performance against our Environmental & Social (E&S) criteria. Where large transactions are involved, in the case of project finance for instance, we’ll also carry out a separate Transaction ESRA.

If there’s any cause for concern following the completion of the ESRA, we’ll agree an action plan with the client to improve their risk profile and engage external specialists if appropriate. The Client ESRA is reviewed each year to capture any changes to the client’s risk profile.

All our relationship managers and credit officers get training to help them assess environmental and social risk according to our criteria, as well as access to a suite of online resources.

There will be some clients operating in sensitive industries that fail to reach the Environmental & Social (E&S) standards we require and also form part of a larger group-level entity.

In these instances, we will not directly support these legal entities, and we will use our influence to help clients enhance standards across the group. 

The relationship between banks and their clients is confidential, and we may not be able to publicly acknowledge our client relationships. We work with our clients to improve practices and transparency in their respective industries and, where appropriate, we will ask clients to waive confidentiality.

We track and monitor complaints through official industry channels (e.g. IFC’s Complaints Ombudsman or RSPO’s complaints panel). If we discover any issues or have these brought to our attention we will investigate these and engage with the client via our relationship managers. 

Due to client confidentiality, or an ongoing complaints process, we may not be able to publicly comment on ongoing investigations. The Environmental & Social Risk Management (ESRM) team have the authority to escalate validated complaints to the Group Reputational Risk Committee for further consideration.

The Equator Principles (EP) is a risk management framework for determining, assessing and managing E&S risk in project development. We became a member of EP in 2003, and we continue to apply the principles to applicable project-related transactions.

The International Finance Corporate (IFC) Performance Standards are internationally recognised as the benchmark standards for the provision of financial services in emerging markets, and are central to our Framework. The Performance Standards provide guidance on how to identify risks and impacts, and are designed to help avoid, mitigate, and manage these risks and impacts in a sustainable way.

We follow industry standards and practices for the sectors we provide financial services to. We work closely with many industry experts and actively participate in numerous industry bodies to develop and maintain the highest standards and best practices.