How SEA can inform lenders

TL;DRAbstract

SEA can be a powerful tool to improve decision-making for plans, policies and programmes, but it can also be a useful for banks. SEA can help lenders address the reputational risks they are exposed to through financing projects that may have a negative impact on the environment and it can also help<br/>with identifying the financial incentives that ‘green’ projects attract. Although bank lending decisions apply to projects, examination of the lending practices of an Australian and a Hungarian bank have shown that decisions about the type of projects to target or avoid are also made at strategic level, such as in the credit policies. It was also found that in some cases lenders become involved in project planning at a very early stage, when projects are conceptualized, and certainly before formal approval is sought from relevant authorities and an EIA is conducted. This suggests that SEA can be a useful tool to inform bank lending decisions.

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