ABSTRACT
During the 1990s much has been written on the fears of financial lenders about environmental liability. As environmental legislation has developed, lenders have been concerned that they may become directly responsible for environmental damage to property taken as security on a debt, or face loss of repayment where a borrower’s solvency has been jeopardised by increased environmental liabilities. In recognition of these risks, lenders have created environmental management policies and have incorporated risk assessments in their lending practice. Now, an additional fear, indicated in the statement above from a senior bank official, is one of reputational risk through association with a polluter.
