Environmental Due Diligence

What is Environmental Due Diligence?

Financial institutions around the world are realizing that environmental risks associated with projects can be as important as other potential risks. Environmental due diligence refers to the targeted environmental screening of proposed investments by commercial banks, pension funds, mutual funds, municipal and private portfolio managers, and credit-rating agencies.

Considering current account deficits, speculative lending, foreign exchange mismanagement, and the decline of domestic currencies that threw Asia’s tiger economies into turmoil in 1997, adopting environmental criteria provides an opportunity for banks to reduce their financial risks while protecting the environment. Environmental due diligence is also a powerful incentive for improving industrial environmental performance.

What is US-AEP Doing to Foster Environmental Due Diligence?

US-AEP is promoting the concept of environmental due diligence among banks, investment companies, and insurance organizations in Asia and increasing the analytical capacity of financial lending institutions. Working with partners and local or regional champions, US-AEP is linking the environmental and financial communities throughout Asia so that the concept of environmental due diligence develops its own constituency.