PARTE IV MERCADO DE TRABAJO Y RECURSOS FINANCIEROS
CAPÍTULO 13 SISTEMA FINANCIERO
4. El sistema bancario
4.1. D ESREGULACIÓN Y COMPETENCIA
Table A1: Summary of financial sector sustainable development initiatives - North America
Investment
in the US $16.3 trillion is currently invested in the investment market, of which approximately 13% is invested in retail socially responsible investment (SRI) trusts.
(www.socialinvest.org)
environmentally screened funds are the fastest growing screened funds in the US
one in every eight dollars invested in managed funds is screened from an ethical or social perspective (Rothschild, 2001).
Superannuation
in the US, the 401(k) fund or pension plan, is a voluntary savings system (Chaplin, 1999)
members of pension plans or 401(k) funds in the US can take out a loan, change their investment choice daily, choose from at least four and an average of 14 investment approaches, and make transactions via voice response systems or the internet (Dunstan, 2000)
by 1998, 38 million workers took part in retirement funds and an estimated $1.41 trillion had been invested (Byte, 1998)
employers are now offering SRI options as part of retirement plans and employees are increasingly choosing this option (The Allen Consulting Group, 2000) Canada is currently investigating implementing legislation similar to the UK Pension Act which requires the disclosure of the extent (if at all) to which social, environment or ethical considerations are taken into account.
Credit and lending
American banks were the first to consider the implementation of environmental policies in relation to credit risk, and to implement methods for assessing environmental factors into the commercial loan approval process (Ganzi et al, 1997) community banks have been established for the purpose of investing in and serving traditionally under-served markets (SustainAbility, 2000)
as at 1999:
- community development banks held US$2,922 m in assets - community development credit
unions held US$601 m in assets (SustainAbility, 2000).
Insurance and re-insurance
the insurance sector is developing products to help industry reduce its exposure to potential liabilities from environmental damages
(Schmidheiny, 1996)
major insurance companies in the US currently provide most environmental insurance products
approximately US$1.2 billion of environmental insurance premiums have been purchased in the US on environmental liability products (www.irmi.com)
in the US the premium volume is expected to increase at an annual rate of 20 to 25 percent
(www.irmi.com).
Criteria
Sector Description
The Comprehensive Environmental Response, Compensation and Liability Act 1980 (CERCLA) (Superfund.)
provides a federal “Superfund” to clean up contaminated sites
enforces liability of persons responsible for releases of hazardous waste at contaminated sites outlines legal liability for the clean-up of contaminated sites
sets out lender liability provisions
Superfund Amendments and Reauthorization Act 1986 (SARA)
made amendments to CERCLA
requires Superfund actions to consider the standards and requirements of State and Federal environmental laws increases State involvement in every phase of the Superfund program
increased public participation in decision making on site cleanup increased size of trust fund to US$8.5 billion
required US EPA to ensure hazards accurately assessed the risk to human health and the environment from hazardous waste sites on National Priorities List (NPL)
The Community Re-Investment Act 1997 (CRA)
requires lenders to make capital available in low and moderate-income urban areas. Concerns have arisen over potential environmental and financial liability for cleanups at sites by lenders, developers and property owners. The CRA establishes initiatives for economic development while easing the fears of financial liability and regulatory burdens
requires that financial institutions, whose annual turnover is above a certain level, to re-invest in registered community programs (AMP Henderson, 2000)
The Securities Act 1933 and the Securities Exchange Act, 1934
requires publicly traded companies to disclose actual or potential environmental liabilities under Regulation S-K, Items 101, 102 and 303
in determining what information should be disclosed, quantitative and qualitative factors, including the significance, the persuasiveness and impact of the matter, should be taken into account
Regulations covering all Financial Sectors
Criteria Investment Superannuation Credit and lending Insurance and re-insurance
Criteria Investment Superannuation Credit and lending Insurance and re-insurance
Criteria
Product & Services
Investment
Types of products include:
community development venture capital funds (CDVC)
- examples include Boston Community Venture Fund, Kentucky Highlands Investment Corporation
(Social Investment Forum, 2000)
community investment funds
- examples include Trillium Investment Management
micro-enterprise programs
- examples include ACCION, Cascadia Revolving Fund, Microenterprise
(Social Investment Forum, 2000)
SRI funds using negative/positive screens
- examples include Dreyfus Third Century Fund)
pooled funds
- examples include National Federation of Community Development Credit Union’s Nominee Deposit Program & Calvert Community Investment Program
(Social Investment Forum, 2000)
venture capital for sustainable projects
- examples include the Calvert Group.
Superannuation
large pension funds invest in screened funds eg NY Municipal
Workers
A number of fund managers (eg Citizen Funds, Calvert Group and Pax World Fund Family) offer SRI retirement products.
Credit and lending
Types of products include:
community development loan funds (CDLFs)
- examples include FleetBoston, Chicago Community
(Social Investment Forum, 2000)
community development credit unions
- examples include National Federation of Community Development Credit Unions
church funds
- examples include Quakers, Presbyterian church (SustainAbility, 2000)
energy efficient mortgages
- examples include Fannie Mae
micro-enterprise lending
- community based organisations providing capital for micro- entrepreneurs unable to obtain capital from conventional financial institutions
non-profit lending
- lending to non profit organisations pursuing a social mission that are unable to obtain capital
lending for social or affordable housing
- risk mortgages or construction loans for housing targeted to low income markets
- examples include Bank of America (Social Investment Organization,
2000).
Insurance and re-insurance
Types of environmental liability insurance products include: - asbestos abatement liability - asbestos containment - cleanup cost cap
- environmental and general liability exposures
- owner’s spill liability
- storage tank pollution insurance (www.irmi.com)
providers include:
- AIG Environmental ($200 M capacity)
- Environmental Compliance Services Inc ($150M capacity), - Kemper Environmental ($200M
capacity)
- Zurich-American ($150M capacity) (www.irmi.com).
Criteria
Analysis/ Screening Tools
Investment
positive, negative and best of sector screening methods are typically used. analysts are using the services of independent environmental rating agencies (eg CEP, IRRC Innovest) (Delphi, 1997)
tobacco is the most common negative screen used in socially screened portfolios in the US (The Allen Consulting Group, 2000) many US mutual fund managers use multiple screens, with 88% of managers using three or more screens (The Allen Consulting Group, 2000) Domini Social Equity Fund has developed a detailed list of positive screening criteria for selecting stocks (The Allen Consulting Group, 2000).
Superannuation
Some fund managers now requiring boards of both US and international companies to develop polices and practices to address environmental issues and equal employment opportunities (eg TIAA-CREF - largest US pension fund)
Credit and lending
the majority of banks in North America in 1997 required environmental due diligence assessments to be conducted as part of all financial transactions
(Delphi, 1997)
questionnaires and environmental checklist management systems have been implemented to assess the customer’s level of environmental risk (e.g. Bank of Nova Scotia, Bank of America).
Insurance and re-insurance
screening tools used to assess environmental issues are well developed due to the influences of asbestos claims and contamination.
Investment
US investor concern is primarily on the issues of:
- military - weapons - tobacco
- alcohol - gambling
Superannuation
US focus is primarily on the issues of: - military - weapons
- tobacco - alcohol - gambling (Flatz, 2000)
Credit and lending
the issue of providing access to credit and banking services for all
community members is high on the agenda of American Bankers’ Association.
Insurance and re-insurance
the use and disposal of asbestos represents the single greatest ecological item to affect the insurance industry in America. This was a direct result of insurance policies being general in the 1980s.
Criteria
Stakeholder Issues
Criteria
Stakeholder Issues
Investment
US investors are also concerned about environmental issues (i.e. the recent BP drilling in Alaska)
shareholder advocacy
- Ethical Funds was the first mutual fund company in Canada to: - adopt corporate dialogue programs - to file shareholder resolution on
socially responsible business practices
- to vote its shares on social and environmental issues
(Social Investment Organisation, 2000).
Superannuation
(refer to previous page)
Credit and lending
(refer to previous page)
Insurance and re-insurance
(refer to previous page)
Criteria Management of Internal Sustainability Issues Investment
Trillium Assets Management reports on environmental and social accountability (The Global Reporters, 2000).
Superannuation
New York State Common Retirement Fund has adopted a responsible Contractor Policy to guide the selection of construction and building operation contractors on their real estate properties (ASFA, 2001).
Credit and lending
The Bank of America prepares public environmental reports
Citigroup published the “Citigroup Global Corporate Citizenship Report” in 2000 detailing its social and environmental involvement as well as other initiatives internal to their organisation.
Insurance and re-insurance
CIS Co-operative Insurance has published environmental and social reports.