|Leverage for the Environment - A Guide to the Private Financial Services Industry (WRI, 1998, 108 pages)|
This concluding chapter takes a broader comparative view of the eight industry segments described in preceding chapters and assesses their significance for the public interest community seeking to influence the environmental character of private financial flows to developing and transition economies. The chapter first compares the eight segments based on their sensitivity to various types of leverage. It then summarizes cross-cutting issues and opportunities relevant to the financial services industry as a whole. Finally, this chapter assesses the opportunity offered by engagement with the private financial services industry compared to that offered by engagement with public sector agencies and operating companies and identifies opportunities for change.
COMPARATIVE OPPORTUNITY ACROSS INDUSTRY SEGMENTS
A first approximation of the relative opportunity offered by the eight segments is determined by the magnitude of assets they control or manage and the extent to which they are active in the sectors or geographic regions of interest. As mentioned in the introduction, the eight segments featured in this guide are presented in order of relative size. Commercial banks collectively represent the world's largest single pool of private capital, with assets in the tens of trillions of dollars, while private foundations collectively control assets in the range of hundreds of billions of dollars. Total assets controlled by the financial sector have been increasing at double-digit rates overall in the 1990s, with mutual funds posting the highest rate of growth and the property and casualty insurance industry lagging behind the rest (1).
In terms of their relative significance for environmental sustainability in developing and transition economies, commercial banks were responsible for approximately 14 percent of North-South financial flows in 1996, and are often involved in the finance of large infrastructure projects with significant environmental footprints. With the increasing securitization of financial flows to developing and transition economies, the activities of investment banks, mutual funds, and pension funds based in industrialized countries have become increasingly international. In 1996, some 38 percent of total North-South financial flows were in the form of bonds or portfolio equity (2), but data on the sectoral composition of those flows are scarce.
Although many insurance companies based in industrialized countries have also diversified their asset portfolios to include emerging market securities to some degree (although industry guidelines propose a limit on such exposure), only the reinsurance industry has diversified its underwriting activities internationally to a significant extent.
The underwriting activities of most primary insurance issuers continue to be primarily or exclusively domestic. Similarly, although many private foundations based in the United States have diversified their asset portfolios to include emerging market securities, only a few foundations fund projects overseas because it is difficult to monitor an international grants portfolio with limited U.S.-based staff (3).
Thus, the opportunities offered by the eight segments vary by overall size, degree of activity in developing and transition economies, and even by the variation in the extent of that activity across different parts of the same segment.
Accessibility and Receptivity
A second approximation of the relative opportunity offered by the eight segments is determined by the accessibility of each segment to the public - through regulation and information disclosure - and by how receptive each segment will be to an environmental message, which may be at least in part a function of the segment's risk aversion and time horizon for realizing return on investment. A more fully elaborated regulatory framework and a higher degree of information disclosure provide the public interest community with more openings for engagement. More risk-averse segments may be more sensitive to potential liabilities related to the environment, while those investing for the long run may have more reason to care about the environmental sustainability of the enterprises in which they are investing.
Figure 10.1 captures these four key characteristics (degree of regulation, availability of information, risk aversion, and time horizon) in a single diagram, and places the eight industry segments side by side for ease of comparison. (The four parameters have been subjectively estimated relative to each other based on expert opinion, and are intended only for comparison across the segments in the context of strategic planning.) As a first approximation, the relative size of the area outlined by the four parameters provides an indication of the current potential for leverage that each segment presents.
According to these measures, commercial banks and pension funds present opportunities due to their high degree of regulation, while life insurance should offer opportunity based on a high degree of risk aversion and long time horizon. Mutual funds and P&C insurance occupy a middle position, while foundations, investment banks, and venture capital score low because of their more limited information disclosure and degree of regulation.
SENSITIVITY TO DIFFERENT TYPES OF LEVERAGE
Sensitivity to Values-Based Leverage
Certain subsegments of the financial services industry not bound by fiduciary responsibility to seek maximum financial return may be relatively more sensitive to values-based leverage translated through individual or private institutional investors. The recent proliferation of socially and environmentally screened mutual funds in industrialized countries is one indication of the industry's responsiveness to investor preferences. Although pension funds often resist pressure to make investment decisions on social or environmental grounds citing fiduciary responsibility, the CalSTRS/CalPERS case described in Box 5.1 illustrates how values-based leverage mobilized members of public employees' unions and called attention to a stock eventually deemed questionable on bottom-line grounds.
Private foundations may also be particularly receptive to values-based leverage because of the apparent inconsistency between values promoted by a foundation's grantmaking activity on the one hand, and its investment activity on the other. The example of the Noyes Foundation described in Box 9.1 illustrates the potential power of linking these two activities.
Sensitivity to Reputational Leverage
In general, the financial services industry is somewhat less exposed to reputational leverage than more consumer-oriented businesses: international investment banks and insurance companies, for example, tend to have low "brand name" recognition among the general public. Commercial banks, however, because of their large customer base of depositors, may be somewhat more sensitive to reputational leverage, as illustrated by the example of the Dresdner Bank, described in Box 2.1. In addition, the role of commercial banks in project finance in developing and transition economies renders them particularly vulnerable to project-specific advocacy.
Most segments of the financial services industry can be expected to respond to reputational leverage targeted at the operating companies or projects that they invest in, if adverse publicity is sufficient to damage either the profitability of the enterprise or its attractiveness to investors. For example, as described in Box 3.1, the reluctance of the financial services industry to participate in new international bond offerings by the State Development Bank of China may in part be due to environmental advocates' having linked such bonds to the financing of the controversial Three Gorges Dam.
Currently, however, in the context of rapidly increasing foreign direct investment, information on the activism against alleged corporate irresponsibility abroad is not readily available to investors. Making sure that analysts on Wall Street are aware of public interest campaigns against individual companies is an important leveraging opportunity in its own right.
Sensitivity to Bottom-Line Leverage
Bottom-line leverage should be a potent method for focusing the attention of all segments of the financial services industry on environmental considerations. Not only should creditors, investors, and underwriters respond to opportunities to increase returns to improve their own profitability; many financial intermediaries such as pension funds are legally obligated to take into account any information that would materially affect the risk and return characteristics of their portfolios. Thus, if environmental factors can be demonstrated to have positive impacts, financial intermediaries could be considered negligent if they do not take them into account (4). Because of the herd-like behavior typical of the financial industry - in other words, once the "conventional wisdom" is successfully challenged, most market participants shift from the old way of doing things to the new way very quickly - a change in perception about the relationship between environmental and financial performance could have dramatic results (5).
Until very recently, the bottom-line interests of the financial services industry related to the environment have focused on the downside risks and potential liabilities associated with failure to perform adequate due diligence on environmental factors. As described in previous chapters, the commercial banking and P&C insurance industries in the United States woke up to the salience of environmental concerns to their businesses only after facing significant losses when they became liable for the costs of cleaning up contamination caused by borrowers or casualty claims related to contamination-related harm.
In the context of developing and transition economies, however, lower environmental standards, inconsistent enforcement, and weak judiciary systems lessen the threat of financiers being held liable for environmental harm. Instead, threats to a firm's so-called "social license to operate," which can be generated by local community resistance to environmentally destructive activity, can impose delays in completing projects or disruptions to operations that can have severe financial consequences, for example to those involved in project finance.
As described in Box 6.1, the P&C insurance industry has begun to take seriously the bottom-line implications of climate change for the profitability of its underwriting business, in light of mounting claims for storm-related damages in recent years. If the linkages among greenhouse gas emissions, climate change, and casualty losses become more accepted, the P&C insurance industry could become a powerful political force in support of national and international climate protection policies. Moreover, at least one firm has begun to take steps toward integrating these concerns into its investment portfolio.
Over the past two years, attention has begun to shift to the positive opportunities offered by taking environmental factors into account in financial decisionmaking. As described in Box 4.1, an emerging body of literature demonstrates a small but statistically significant positive correlation between a firm's environmental performance and its financial performance (6). This finding should be of interest to mutual funds, pension funds, and asset managers for insurance companies and foundations, which may be able to increase their overall returns by overweighting environmentally proactive companies in their portfolios.
Finally, venture capitalists should be interested in financing new environmentally driven products and services that offer a competitive advantage due to changing public policies and preferences for environmental sustainability. As described in Box 8.1, the identification and packaging of such opportunities, particularly in developing and transition countries, is an important leveraging opportunity for the public interest community and for public institutions such as the International Finance Corporation.
Sensitivity to Policy Leverage
Policy leverage is potentially the most potent type of leverage to be brought to bear across all segments of the financial services industry, harnessing the power of the government to regulate corporate activity and to create incentives through fiscal policies. Policy change in turn creates new opportunities for bottom-line leverage, by altering the relative profitability of environmentally friendly corporate performance.
In the first instance, the financial services industry can often be relied upon to amplify the effect of policy change imposed on the operating companies that are the industry's clients. For example, the U.S. stock market reacted negatively when firms were first required to disclose Toxic Release Inventory (TRI) data in 1989, reflecting a change in investor expectations about the likely pollution abatement costs faced by those firms (7).
There is also opportunity for policy leverage directly toward segments of the financial industry itself. With the exception of venture capital and private foundations, the financial services industry is rather highly regulated, but current regulatory frameworks and institutions - particularly those at the international level - rarely address environmental concerns explicitly. Requiring banks, insurance companies, and investment managers to put into place and to disclose information about their environmental risk management systems would be one opportunity to remedy this deficit (8).
Finally, fiscal incentives can be offered to investors that create new bottom-line opportunities for the financial services industry. Following a parliamentary initiative, in 1995 the Dutch Ministry of Finance declared interest and dividend income from investment in certain "green" investment funds to be tax-free. The purpose of the tax break is to encourage investment in designated categories of approved environmental projects, including developing and maintaining forests, sustainable energy, environmentally friendly housing, and organic farming. The policy has created a sudden surge in demand for such new investment products, leading to almost 2 billion Dutch guilders in finance for green projects in 1997 (9).
CROSS-CUTTING ISSUES AND OPPORTUNITIES
The segment-by-segment descriptions of the financial services industry provided in this guide reveal several cross-cutting issues and opportunities characteristic of the industry as a whole. These include the importance of information disclosure and standard performance indicators, the role of providers of information and analysis to the industry, the potential to connect "both sides of the house" - or bridge separate parts of the same industry segment - and the continuing importance of shareholder activism. In addition, ongoing structural and regulatory changes in the industry, related to financial globalization, raise a new set of issues and opportunities.
Importance of Information Disclosure and Standard Performance Indicators
All four types of leverage described in this guide depend on information disclosure and performance indicators in order to most effectively influence the behavior of the financial services industry. Values-based investors must be able to screen out bad actors and screen in environmental performers, requiring both firm-specific information and information related to the composition of investment portfolios. Reputational leverage depends on the ability to link specific investors to the environmental performance of specific firms or projects. Financial markets require consistent and comparable information regarding environmental performance to be able to discern and reward superior environmental performance. The enforcement of policy leverage is similarly constrained. In particular, the ability to award incentives for environmentally friendly investment - such as the tax breaks offered in the Netherlands described above - depends on the existence of agreed-upon criteria for "green" certification.
The private financial services industry and the public interest community thus share an interest in enhanced corporate transparency and disclosure of information, especially by firms in developing and transition economies. A 1997 study by the Investor Responsibility Research Center found that of 97 S&P 500 corporations with foreign operations that were examined, approximately 75 percent included no data in their publicly available documents regarding their environmental performance overseas (10). Strengthening the disclosure requirements faced by transnational corporations is thus an important leveraging opportunity, and engagement with the SEC in the United States, its analogues in other countries, and the International Organization of Securities Commissions is an important next step for the environmental community.
However, information alone is not useful if it is not presented in a consistent and comparable manner. The development of standard indicators and formats for reporting on environmental performance is thus a critical challenge, and one that presents an opportunity for collaboration between the environmental and financial communities (11). One example of such collaboration is the Global Reporting Initiative of the Coalition for Environmentally Responsible Economies (CERES), which is seeking to standardize corporate environmental reporting worldwide (12).
Adaptation of such standards to be used and applied to the financial services industry is a complementary challenge. Efforts are currently underway under the auspices of the European Commission to modify the European Eco-Management and Audit Scheme (EMAS) to meet the needs of the financial services sector and to enable the sector to participate in the scheme (13).
Box 10.1 The UNEP Financial Services Initiatives on the Environment
Background: Since 1991, the United Nations Environment Programme (UNEP) has been instrumental in drawing the attention of the financial services industry to environmental concerns In 1992, UNEP brokered the "Statement by Banks on the Environment and Sustainable Development" (later revised and renamed the "Statement by Financial Institutions"), and in 1995 followed with a "Statement of Environmental Commitment by the Insurance Industry" Both statements include commitments to mainstream environmental considerations into core business practices, such as risk assessment and management
Action: By July 1998, 115 financial institutions and 78 insurance companies were signatories to the statements, and thereby commited to incorporate environmental considerations into internal and external business activities In an ongoing effort to translate those commitments into practical actions, UNEP organizes outreach meetings and collaborations with regional and national banking associations, holds an annual roundtable meeting with the international financial community, and fosters the sharing of best practices and effective environmental management tools through a quarterly newsletter, an online clearinghouse of resources, "how-to" materials, and topic-specific seminars
Outcome: UNEP's principal accomplishment has been to facilitate dialogue within the financial services and insurance industries and between the financial and environmental communities on how to meet the goals of the statements An outcome of the intra-industry dialogue is that 50 companies from the insurance and financial services industries have agreed to support the market for photovoltaic cells through a combination of direct investments in technology and installation of solar panels on their buildings The dialogue has also encouraged financial and environmental professionals to engage each others' policy arenas The number of environmentalists participating in events sponsored by the UNEP Financial Services Initiatives has been steadily increasing, while members of the Insurance Initiative presented a position statement on climate change at the Conference of Parties to the Framework Convention on Climate Change in Kyoto in 1997
Analysis: While the bottom-line arguments that link environmental concerns and the financial services industry have always been powerful, they have existed in an institutional vacuum The contribution of the UNEP initiatives has been to articulate these arguments clearly, provide a forum in which they can be fully developed and disseminated, and provide vehicles through which they can be integrated into the internal activities and external policy frameworks of the financial institutions
Sources: UNEP Insurance Industry Initiative information
packet and background papers "UNEP's Financial Services Initiative" UNEP
Financial Services Initiative Newsletter, Issue I (December 1996), Issue
2 (August 1997), and Issue 3 (January 1998), and Vorhies, Deborah "UNEP's Effort
to Increase Environmental Responsibility in Banking, Investment Sectors"
International Environmental Reporter April 3, 1996
The Role of Providers of Information and Analysis
Among the most influential actors in the financial services industry are purveyors of information and analysis regarding the value of various investment opportunities: ratings agencies, "sell-side" analysts, and investment advisory services. In addition, regulators, industry associations, and the financial press all play a role in "agenda-setting," and developing norms of industry practice.
Particularly in the realm of bottom-line leverage, ensuring knowledge and understanding among these actors of the potential relevance of environmental information to financial analysis is crucial. Currently, most professionals in the industry at best lack awareness of the relevance of environmental factors to their work, and often are even actively skeptical.
The implication for the public interest community is that financial industry professionals must be made aware of the emerging literature linking environmental and financial performance. Although the United Nations Environment Programme (UNEP) Financial Services and Insurance Initiatives described in Box 10.1 are an important step toward that goal, more effort is needed to penetrate the mainstream investment community. Once they become convinced of the relevance of environmental issues to their industry, regulators, industry associations, and the financial press all provide potential vehicles for getting the message out.
Connecting "Both Sides of the House"
A feature common to several financial industry segments is that environmental sensitivity occurs in different degrees in different parts of the same organization. For example, the underwriting side of the insurance industry as a whole has developed significant environmental expertise to deal with claims related to toxic contamination, and the P&C insurance industry has become increasingly concerned about how climate change may contribute to the increased incidence of catastrophic loss. However, this expertise has not yet been brought to bear on the investment activities of the same firms. Similarly, the public interest values expressed in the grantmaking and program-related investments of private foundations are seldom reflected in the investment portfolios of those same foundations. Illuminating these inconsistencies may offer a promising strategy to begin connecting "both sides of the house."
Importance of Shareholder Activism
The examples in Boxes 2.1, 5.1, and 9.1 highlight the continuing utility of shareholder activism in putting environmental concerns on the agendas of operating companies and financial entities. The financial services industry can itself have leverage over the environmental performance of operating companies through exercising shareholder rights, as illustrated by the CalPERS/CalSTRS and Noyes Foundation examples. Such resolutions can alert the broader investment community to concerns about a corporation's environmental performance. At the same time, shareholder resolutions directed at the financial entities themselves - such as the one presented by Urgewald at the Dresdner Bank shareholders' meeting - can be an effective way to generate a response to environmental concerns related to a particular project and can induce an institution to adopt stronger environmental policies overall.
Context of Financial Globalization
The financial services industry is experiencing significant change globally. In industrialized countries, a trend is occuring toward increasing consolidation, illustrated by several "megamergers" that have taken place in 1997 and 1998. Consolidation is also blurring the boundaries among previously distinct industry segments. This situation will require regulatory innovation, and perhaps provide opportunities for upward harmonization of information disclosure and other policies to support and encourage organizations to improve environmental performance. Consolidation is also creating a small group of well-known global companies, which may be more vulnerable to reputational leverage than their smaller, less widely known, premerger components. However, consolidation could also have the effect of reducing competition, rendering companies more impervious to public interest pressure.
In many developing and transition economies, the "rules of the game" for the financial sector are being written - or rewritten - in the context of financial globalization. In the wake of the Asian financial crisis, banking sector regulation is undergoing reform in several countries, providing an opportunity to increase transparency overall and potentially to include new disclosure requirements related to environmental management and risk. Domestic capital markets are being created in emerging markets, providing an opportunity to impose environmental criteria on newly publicly listed companies. Prior to the financial crisis, for example, the Stock Exchange of Thailand required manufacturing and industrial listing applicants to undergo an environmental audit and to submit an environmental impact assessment report for new manufacturing plants (14).
At the same time, there is concern that the emergence of ever-larger transnational corporations and new international investment rules - such as those proposed under the Multilateral Agreement on Investment (MAI) - will further constrain the ability of governments to condition the welcome afforded to foreign investment on its environmental character (15). As trade in financial services is itself liberalized, the need for global standards and international cooperation for financial sector regulation has become apparent (16). Placing environmental issues on the agenda in relevant policy arenas is an important opportunity for the public interest community.
OVERALL INDUSTRY SIGNIFICANCE FOR PROMOTING ENVIRONMENTAL SUSTAINABILITY
Because private financial flows to developing and transition economies have dramatically increased, and the degree of securitization of those flows has increased, the private financial services industry has become an important leverage point for the environment. However, the relative opportunity presented to the public interest community through direct engagement with the industry, compared to alternative engagements with public sector institutions and private sector operating companies, is not immediately obvious. The international "rules of the game" for governing transboundary economic relationships are in flux, making it more complicated to identify the most strategic points of engagement.
Compared to Direct Engagement with Public Institutions
Compared to engagement with public sector institutions - including governments of countries where financial firms are located, governments of countries receiving international investments, and multilateral institutions such as the World Bank Group - engagement of the private financial services industry on environmental issues is more difficult. The number of private financial institutions is far greater than the number of public counterparts, and these institutions are accountable to private shareholders and clients rather than to the general public. Accordingly, compared to strategies aimed at influencing public institutions, engagement with the private financial services industry requires a higher degree of targeting and different strategies to deal with a lesser degree of transparency and public accountability.
In contrast to direct engagement with the private financial services industry, engagement with governments can significantly influence systemic change in how the industry operates through policy leverage. In industrialized countries, there is significant scope for further strengthening requirements and enforcement related to environmental risk management and information disclosure.
However, where the environmental implications of increasing financial flows are concerned, the governments of many countries that receive international financing are characterized by "responsibility vacuums" that are due to limited political legitimacy and institutional capacity (17). Public interest groups in less democratic societies may be less able than their counterparts elsewhere to hold public agencies and private corporations accountable for their environmental performance; at the same time, governments may hesitate to raise or enforce environmental standards for fear of driving away coveted capital flows (18). Influencing the private financial services industry based in industrialized countries may thus be a "second best" strategy for integrating environmental considerations into financial decisions in recipient countries where there are political or capacity constraints on more direct public sector regulation of corporate activity.
Engagement with multilateral financial institutions may offer indirect policy leverage through advice to borrower governments. Through their cofinancing and guarantee operations, as well as their policy advice on designing the "rules of the game" for both the productive and financial sectors, multilateral institutions are also well positioned to influence a far greater proportion of international financial flows than just their own portfolios.
The International Finance Corporation (IFC), for example, requires its financial sector clients to attend a one-week training seminar in environmental management, and a recent survey of IFC clients revealed that the IFC's assistance on environmental matters was among the top three most valued services (19). The next frontier is to integrate environmental objectives into the policy advice and technical assistance provided by such multilateral public agencies to client governments in the design of the "rules of the game." For example, such agencies could encourage governments to address environmental concerns in the listing criteria for stock exchanges and more general financial sector disclosure requirements.
Compared to Direct Engagement with Operating Companies
The direct ecological "footprint" of the financial services industry is small compared to that of the most extractive or pollution-intensive industries. Although there is likely room to make the industry more eco-efficient with respect to savings of paper and lighting, for example, the financial services industry is of interest to the environmental community primarily because of its potential leverage over operating companies through market mechanisms or as a constituency for policy change.
Engagement with the financial services industry is thus a complement to, rather than a substitute for, engagement with operating companies, including transnational corporations as well as domestic firms in developing and transition economies. Corporations should be at least as sensitive to bottom-line leverage as their financiers: corporate managers and investors alike are interested in opportunities to increase profits through improved environmental performance. However, to the extent that the financial community recognizes such opportunities first, it can have a powerful multiplier effect by communicating an environmental message to a large base of corporate clients.
Creditors, investors, and underwriters can reinforce reputational or bottom-line leverage directed at a particular company: environmentally irresponsible companies may not pay attention to environmental critics until the financial community begins to do so. At the same time, for environmentally responsible companies to be rewarded for their superior performance, financial markets must be able to recognize environmentally sound behavior and value it appropriately. Industry leaders in environmental management are thus an important constituency for change in market perceptions and policy requirements related to environmental factors.
Precisely because attention to the relationship between environmental issues and the financial services industry is new, it is likely that a significant amount of "low-hanging fruit" remains to be harvested. Most individual and institutional investors are not aware of the environmental profiles of their investment portfolios, and at least some portion of those investors is likely to be sensitive to values-based or reputational leverage. Most financial industry professionals are not aware of the empirical evidence linking environmental and financial performance, and many would be interested in learning more if the value in doing so were more clear. Most financial industry regulators have not considered the possibility of pursuing environmental objectives through disclosure requirements and fiscal incentives, and perhaps would do so if exposed to the idea.
Until recently, the efforts of the public interest community, and particularly environmentalists, to influence the financial services industry have depended on the use of values-based or reputational leverage. A new generation of strategies employing bottom-line and policy leverage is just getting underway, starting an important debate about which of the two types of leverage is most powerful - or most politically feasible - in the context of financial globalization. Over the next few years, significant experience will be gained as alternative strategies are tested and evaluated.
Although engagement with the private financial services industry is only one of several avenues to be pursued by the public interest community in support of environmentally sustainable development - and is not necessarily the most important - significant leveraging potential remains to be exploited. This activity, however, should complement rather than substitute for direct engagement with public agencies and operating companies. Both environmental groups and industry professionals are on the steep part of the learning curve in identifying opportunities to meet common objectives. Because of yet-to-be-exploited opportunities to influence investors, industry professionals, and regulators, engagement of the financial services industry is an avenue worth pursuing to obtain leverage for the environment.
1. The Conference Board: Global Corporate Governance Research Center. Financial Assets & Equity Holdings. Vol. 2, No. 1 (June 1998). Figure 2: Institutional Investor Growth 1980-1997, and Table 2: Institutional Investor Asset Growth by Category 1970 - 1997.
2. The World Bank. Global Development Finance. Washington, DC: World Bank. 1996.
3. Susan L. Gibbs. "The Global Population Nexus: A U.S. Foundation Perspective. "In Lessons from the Field: Integration of Population and Environment. 1997. (Presented to the panel session "Population and the Environment" at the American Public Health Association 125th Annual Meeting, Indianapolis, November 12, 1997), p. 55.
4. Don Reed. "Green Shareholder Value: Hype or Hit?" MEB Perspectives. Washington, DC: World Resources Institute (forthcoming).
5. Don Reed. World Resources Institute. Personal communication. August 3, 1998.
6. For a listing of relevant studies, see Innovest website: http://www.innovest.org; and for an analysis of this literature, see Don Reed. "Green Shareholder Value: Hype or Hit?" MEB Perspectives. Washington, DC: World Resources Institute (forthcoming).
7. James T. Hamilton. "Pollution as News: Media and Stock Market Reactions to the Toxics Release Inventory Data Journal of Environmental Economics and Management. Vol. 28 (1995). p. 109.
8. Delphi International, in association with Ecologic GMBH. The Role of Financial Institutions in Achieving Sustainable Development. Report to the European Commission. November 1997. p. 88.
9. Dr. Willem Vermeend and Jacob van der Vaart. Greening Taxes: The Dutch Model. Kluwer-Deventer. April 1998. pp. 6, 60.
10. Alison Cassady. "Disclosure of Environmental Information about S&P 500 Companies' Non-U.S. Operations." Washington, DC: Environmental Information Service, Investor Responsibility Research Center. 1997 (draft).
11. Daryl Ditz and Janet Ranganathan. Measuring Up: Toward a Common Framework for Tracking Corporate Environmental Performance. Washington, DC: World Resources Institute. 1997.
12. Janet Ranganathan. "Sustainability Rulers: Measuring Corporate Environmental & Social Performance." Sustainable Enterprise Perspective Series. Washington, DC: World Resources Institute. May 1998. Available online at http://www.wri.org/meb/sei/state.html; and see http://www.ceres.org/bankboston.html.
13. NatWest Group. EMAS and the Financial Services Sector: A Report from Six Banks. London. August 1997. p. 5.
14. Patareeya Benjapolchai, Senior Vice President, Stock Exchange of Thailand. "Stock Exchange Policies for Protecting the Environment." (Presented at UNEP's Third International Round-Table Meeting on Finance and the Environment, New York, May 22-23, 1997). p. 3.
15. Michelle Sforza-Roderick, Scott Nova, and Mark Weisbrot. Writing the Constitution of a Single Global Economy: A Concise Guide to the Multilateral Agreement on Investment. Preamble Briefing Paper. Washington, DC: Preamble Center for Public Policy. May 20, 1997.
16. Wolfgang H. Reinicke. "Regulatory Challenges of Global Financial Integration: The Basle Agreement and Beyond." Prepared for the Council on Foreign Relations Study Group on Sovereignty, Non-state Actors, and a New World Politics. Washington, DC: The Brookings Institution. April 1995 (draft).
17. Responsibility vacuum is a term coined by Wolfgang Reinicke of the World Bank.
18. Lyuba Zarsky. "Stuck in the Mud? Nation-States, Globalisation, and Environment." In OECD Proceedings: Globalisation and Environment, Preliminary Perspectives. 1997.
19. Leticia Oliveira. IFC. Personal communication. August 4, 1998.