[PDF] Environmental Risks: Should Banks Be Liable?

How does climate risk affect a bank?

At the individual bank level, the effects of climate risk could impact many products in the portfolio, including loans, derivatives, and investments. Potentially, there could be trillions of assets “at risk” from climate change.

Why is environmental liability important?

This article examines the importance of environmental liability for all financial institutions and investors that hold or invest in loans where real estate is used as collateral. Environmental liability is a critical issue for all financial institutions and investors that hold or invest in loans in which real estate is used as collateral.

What is lender liability environmental insurance?

(In order to be protected, a lender must be named as an additional insured.) Lender liability environmental insurance policies are being used by lenders as a lower-cost substitute for, and supplement to, traditional environmental due diligence.

Does a bank have a sustainable investment strategy?

Sustainability (the potential impact of the bank and its activity on the environment) has simultaneously emerged as another concern. One group of stakeholders, investors, has increased its focus on green and socially responsible fund investment. Assessments of environmental sustainability have become key investment criteria.