Archived press release

UK Banks Failing To Implement Green Equator Principles

4 June 2004

UK banks are failing to implement their own green guidelines on project finance, a new report published today reveals. `Principles, Profit or just PR' [1], launched by Friends of the Earth and the Bank Track network [2] shows that Barclays, Standard Charter, Royal Bank of Scotland and HSBC are all involved or considering financing projects that would breach the Equator Principles.

The Equator Principles, based on the World Bank's social and environmental polices, were adopted in June 2003 by a number of private banks to apply to project finance[3]. Four UK banks have signed the Equator Principles including Barclays, HSBC, Standard Charter and the Royal Bank of Scotland.

The report reveals that since UK banks signed up to the Principles, Barclays bank helped finance a controversial hydropower project in the Icelandic highlands, Royal Bank of Scotland helped finance the Baku-Tbilisi-Ceyhan pipeline, Standard Charter bank considered financing a massive dam at Omkareshwar in India and HSBC is currently considering financing a copper mine in the mountains of the Peruvian Andes, posing a risk to the Amazon Basin.

The report finds that the implementation of the Principles has been poor with most banks refusing to share or publish any data that can verify they are putting the principles into practice. But the report also reveals that some of the banks were also involved in lobbying the World Bank to block the Extractive Industries Review, which was seeking to develop more stringent environmental and social standards.

Friends of the Earth's Corporate Accountability Campaigner Simon McRae said:

"The UK banks signed up to the Equator Principles but they seem reluctant to be held accountable for their behaviour and the evidence suggests they are failing to put them into practice. One year on, we have to question whether this voluntary commitment to environmental good practice is worth the paper it is written on."

Notes

[1] BankTrack is a new network of civil society organisations tracking the operations of the private financial sector and its effect on people and the environment (see www.banktrack.org)

[2] `Principles, Profit or PR:Triple P investments under the Equator Principle' report is available from the Banktrack website

[3] For more on Equator Principles see: www.equatorprinciples.org

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Published by Friends of the Earth Trust