Il-kontabilità tal-banek għall-ħsara ambjentali

Meta niddibattu l-ħsara ambjentali li qed tiżdied kontinwament madwarna nagħmlu tajjeb li nippuntaw subgħajna lejn ir-regolaturi nkompetenti u lejn ir-regħba tal-hekk imsejħa żviluppaturi. Wasal iż-żmien li ma dawn inżidu l-banek, għax huma l-banek li jiffanzjaw il-proġetti ta’ żvilupp u allura huma jagħmlu din il-ħsara possibli. Anke l-banek, għaldaqstant għandhom l-obbligu li jerfgħu ir-responsabbiltà fuq spallejhom għall-ħsara ambjentali li qed isseħħ: huma qed jiffinanzjawha.

Meta neżaminaw ir-rapporti annwali tal-banek lokali ewlenin hu ċar li dawn huma nteressati biss fil- profitti. Kontinwament taparsi jħossu għall ambjent. Dan jagħmluh biss u esklussivament biex jipproteġu r-reputazzjoni tagħhom.

Il-banek ipinġu lilhom infushom bħala li qegħdin hemm biex ikunu ta’ għajnuna. Regolarment iroxxu ftit flus favur numru ta’ kawżi ġusti. Iżda minkejja din is-sensittività  artifiċjali lejn setturi diversi tal-komunità, il-profitt jibqa’ dejjem prijorità fuq il-lejaltà lejn in-nies u lejn il-komunità.

L-attitudni tagħhom lejn proġetti ta’ żvilupp hi indikattiva ta’ dan. Il-banek rarament jindikaw fl-istqarrijiet pubbliċi inkella fir-rapporti tagħhom jekk u kif jagħtu każ ta’ impatti ambjentali u soċjali meta jkunu qed jikkunsidraw li jgħinu biex ikun iffinanzjat xi proġett ta’ żvilupp.  

Fl-aħħar rapport annwali tiegħu, per eżempju, l-HSBC jirreferi għal dawk li jissejħu Equator Principles. Dawn l-Equator Principles huma sett ta’ kriterji miftehma fuq skala internazzjonali bejn banek u istituzzjonijiet finanzjarji. Huma qafas regolatorju volontarju dwar kif l-istituzzjonijiet finanzjarji għandhom jeżaminaw u jagħtu piz lir-riskji soċjali u ambjentali assoċjati ma’ proġetti li jkunu quddiemhom għall-finanzjament.  Jistabilixxu l-kriterji minimi li għandhom ikunu applikati huma u jittieħdu deċiżjonijiet dwar dawn ir-riskji.  Fost affarijiet oħra, dawn l-Equator Principles jitkellmu dwar kif il-banek u l-istituzzjonijiet finanzjarji għandhom jiddjalogaw mal-utenti (stakeholders) dwar azzjoni effettiva biex ikunu ndirizzati ir-riskji ambjentali u soċjali minn proġetti li jkunu quddiemhom għall-finanzjament.

L-HSBC, sal-lum, ma ippubblikax rapporti jew xi tip ta’ informazzjoni oħra dwar il-mod prattiku kif il-bank qed japplika dawn il-prinċipji f’Malta. Għad irridu naraw kif il-bank qed jassigura ruħu li r-riskji ambjentali u soċjali ġew identifikati u ndirizzati u speċifikament kif il-klijenti żviluppaturi tal-bank qed jiddjalogaw mal-utenti (stakeholders).

Fir-rapport annwali tal-Bank of Valletta, min-naħa l-oħra, insibu spjegazzjoni tal-miri tal-Ġnus Magħquda dwar l-iżvilupp sostenibbli, deskrizzjoni dwar il-kawżi ġusti appoġġjati mill-bank u rendikont tal-azzjoni mittieħda biex il-friegħi tal-bank ikunu effiċjenti fl-użu tal-enerġija u joperaw b’mod li ma jagħmlux ħsara ambjentali. Ir-rapport jiddeskrivi ukoll is-servizzi tal-bank biex il-klijenti tiegħu ikollhom aċċess aħjar għal finanzi biex jimplementaw diversi miżuri ambjentali. Ir-rapport tal-BoV ma jagħmel l-ebda referenza għall-Equator Principles jew xi qafas regolatorju alternattiv.

Il-Lombard Bank, min-naħa l-oħra, fl-aħħar rapport annwali tiegħu jemfasizza l-attenzjoni tal-management biex jimminimizza l-impatti ambjentali mill-operazzjonijiet tiegħu. Jgħidilna li hu ukoll jgħin kawżi ġusti! L-anqas il-Lombard Bank ma jirreferi għall- Equator Principles jew xi linji gwida oħra dwar x’għandu jsir biex il-klijenti żviluppaturi jkunu sorveljati aħjar mill-bank.

Fuq livell ta’ Unjoni Ewropeja il-Bank Ċentrali Ewropew għadu kif approva dokument b’linja gwida dwar ir-riskji klimatiċi u ambjentali li hu applikabbli għas-settur bankarju kollu fl-Unjoni minn din is-sena. Primarjament dan id-dokument jirrigwarda ir-riskji klimatiċi.

Il-banek għandhom responsabbiltà li jassiguraw illi meta jiffinanzjaw proġetti ta’ żvilupp, il-finanzi li jipprovdu ma jkunux użati biex issir jew biex tkun aċċelerata ħsara ambjentali u/jew soċjali. Meta din il-ħsara ambjentali u/jew soċjali sseħħ, ir-responsabbilta m’għandiex tintrefa biss mill-iżviluppatur u mir-regolaturi imma ukoll mill-bank. Għax anke l-bank għandu jkun kontabbli. Wara kollox hu l-bank permezz tal-finanzjament li jipprovdi li jagħmel l-iżvilupp possibli. Kull meta l-banek ikunu kompliċi fi ħsara ambjentali u/jew soċjali ikollhom huma wkoll jerfgħu r-responsabbiltà. Mingħajr l-involviment tagħhom, wara kollox, il-ħsara ma isseħħx!

Ippubblikat fuq Illum: il-Ħadd 29 ta’ Awwissu 2021

Holding banks to account for environmental damage

When discussing the current environmental onslaught developing around us, we rightly focus on incompetent regulators and greedy developers. It is about time that we also address the role of the banks: they make environmental degradation possible as they generally finance the development works which cause the said degradation. As a result, it is about time that banks too shoulder their responsibility for the ever-increasing environmental degradation.

Going through the annual reports of the major local banks it is more than clear that banks are only interested in profits. They engage in continuous greenwashing in order to try and minimise their reputational damage.

The banks portrait themselves as being there to help. They regularly sprinkle some cash to sponsor worthy causes. Notwithstanding this artificial sensitivity towards various sectors of the community, profits always take a priority over people in the banks’ operations.  Financing of development projects are a case in point. Banks rarely indicate in their public statements and reports whether and to what extent they factor in environmental and social considerations when deciding whether to make finance available for any particular development project.

HSBC, for example, refers to the applicability of the Equator Principles in its latest annual report. The Equator Principles are a risk management framework adopted by a number of financial institutions “for determining, assessing and managing environmental and social risk in projects.” They are intended to provide a minimum standard for due diligence and monitoring to support responsible risk decision-making.  Among other matters the Equator Principles deal with stakeholder engagement and require effective action dealing with environmental and social risks by developers who seek financial facilities from banks.

HSBC has not to date publicly reported on the matter as to the practical manner in which it applies these principles in Malta. We have yet to see how the bank establishes that environmental and social risks have been assessed and specifically the extent to which the bank ensures that proper stakeholder engagement has been carried out by its developer clients!

The Bank of Valletta annual report on the other hand gives us its take on the UN’s Sustainable Development Goals, describes at some length the worthy causes which it supports and explains the action taken to ensure that its branches are energy efficient and environmentally friendly. It also describes its services which facilitate client access to finance environmentally friendly initiatives. The Bank of Valletta Annual Report does not make any reference to the Equator Principles.

Lombard Bank in its latest annual report emphasises that it takes great care in minimising the environmental impacts of its operations. It also stresses its extensive contributions and initiatives to a number of worthy causes. Lombard Bank does not refer to the Equator Principles or any other benchmark or standard which it applies when dealing with its developer clients.

On an EU level the European Central Bank has very recently approved a “Guide on Climate-Related and Environmental Risks” applicable to the banking sector throughout the European Union as from this year.  As its title indicates it is primarily concerned with climate-related risks.

Banks have a responsibility to ensure that when financing development projects, the finance made available is not utilised to cause or accelerate environmental and/or social damage. Whenever such environmental and/or social damage arises it is not just the developers and the regulators which should shoulder responsibility for the said damage. Even banks should be held to account. They make it possible! Banks should pay the price whenever they are collaborators in the ever-increasing environmental degradation. They make it happen!

Published in The Malta Independent on Sunday : 29 August 2021

Il-Bank of Valletta, jsodd it-toqob

 

Bħalissa d-diskussjoni politika hi dwar min kien mistieden għall-ikel tlett snin ilu. Ikliet mistura u ikliet magħrufa. Kif ukoll dwar min iktar seta kien preżenti. Dwar min serva l-ikel u dwar min maxtar.

Mera mera fuq il-ħajt: min hu l-iktar maħmuġ għid? Il-mera ma tafx lil min ser taqbad temmen, tant ilha tisma’ affarijiet. Imn’alla li l-mera ma titkellimx għax kieku min jaf kemm toħroġ bi stejjer bejn affidavit u ieħor, bejn libell u ieħor.

Smajna b’donazzjonijiet li jidhru bħala ħlas għal reklami kif ukoll dwar dak il-loan imdaqqas mal-BoV li spiċċa ma tħallasx. Tkun storja tajba kieku tkun magħrufa bl-egħruq u x-xniexel. Għax donnu li l-BoV għandu d-destin li jsodd it-toqob finanzjarji ta’ dawk li huma komdi f’dan il-pajjiż.

Sadd it-toqob tas-self tad-Daewoo. Sadd it-toqob tal-Air Malta biex jixtru l-fuel. Sadd it-toqob tal-magħżulin għall-power station tal-gass f’Delimara. Sadd it-toqob ta’ min irid jirtira kmieni mix-xogħol, imma żamm id-dritt biex jidħol lura.

Sabuħ għal snienhom lill-BoV.

Fil-BOV bil-benefiċċju tal- “early retirement”, iżda tista’ tiġi lura !

 

Il-Bank of Valletta qiegħed fl-aħbarijiet. M’humiex aħbarijiet li jagħmlu l-ġid  lill-bank.

Mhux qed nitkellem dwar il-garanzija għas-self dwar il-power station ta’ Delimara, jew il-garanzija għall-avvanzi biex l-Air Malta tixtri l-fuel, iżda dwar l-iskema ta’ irtirar kmieni.

Kif, qrajna, l-ftehim kollettiv tal-Bank jagħti dritt lill-bank li jkollu skema ta’ irtirar kmieni mix-xogħol (early retirement). Il-punt mhux jekk Michael Falzon ġiex mogħti inqas jew iktar minn Fenech Adami inkella xi ħaddieħor b’kunjomu Borg Costanzi (ismijiet li ssemmew fil-Parlament). Iżda jekk skema ta’ irtirar kmieni fil-BOV tagħmilx sens.

Hemm xi sens li tħarreġ lin-nies u fl-eta ta’ madwar ħamsin sena tħallashom biex jitilqu? Il-bank qed iberbaq il-“kapital uman” tiegħu apparti l-kapital finanzjarju.  Dan apparti li għadni ma nistax nifhem kif tieħu l-benefiċċju minn skema biex tirtira kmieni u mbagħad iżżomm id-dritt li tidħol lura. Jew irtirajt kmieni jew ma irtirajtx.

Il-BOV qed iberbaq ir-riżorsi u jista’ juża’ flus il-bank ferm aħjar minn hekk, mhux biss fl-interess tal-bank innifsu iżda anke fl-interess tal-impjegati tiegħu.

Anke l-Greċja, sa ftit ilu, kinet mimlija skemi ta’ irtirar kmieni!

 

Snippets from AD’s electoral manifesto: (1) Corporate Social Responsibility

The following extract is taken verbatim from Chapter 14 of AD’s Electoral Manifesto

Corporate Social Responsibility (CSR)
In today’s world various organisations publish reports on a regular basis in which they list their impacts primarily on the community in which they operate.
In Malta only two companies do so, Bank of Valletta and Vodafone. To date they have published two editions of their reports. Each of these publications is of a positive nature but in every case there is room for improvement both in the policy direction as well as in content.
It is necessary that all companies listed on the Stock Exchange as well as parastatal organisations such as Enemalta and the Water Services Corporation together with all companies employing more than 1000 employees publish such information. It is important to underline that environmental reporting is as important as financial reporting and hence it should also be audited.

L-estratt segwenti hu mehud kelma b’kelma mill-Manifest Elettorali ta’ Alternattiva Demokratika (Kaptlu 14)

Responsabbiltà Soċjali tal-Industrija u n-Negozju (CSR)
Fid-dinja tal-lum huma diversi l-organizzazzjonijiet li jippubblikaw fuq bażi regolari rapporti li fihom jelenkaw f’dettall l-impatti tagħhom prinċipalment (iżda mhux biss) fuq il-komunità fejn joperaw.
F’Malta huma żewg kumpaniji biss li jagħmlu dand: il-Bank of Valletta u Vodafone. S’issa ppubblikaw żewg edizzjonijiet tar-rapporti tagħhom. Kull wieħed minn dawn il-pubblikazzjonijiet hu ta’ kontribut pożittiv imma f’kull każ hemm lok għal titjib kemm fid-direzzjoni politika kif ukoll fil-kontenut tar-rapport.
Huwa neċessarju li dan ikun estiż għall-kumpaniji kollha elenkati fil-Borża kif ukoll għall-Korpi Parastatali bħall-Enemalta u l-Korporazzjoni għas-Servizzi tal-Ilma flimkien ma’ dawk il-kumpaniji fis-settur privat li jimpjegaw iktar minn 1,000 ruħ. Huwa importanti li jkun sottolineat li r-rappurtaġġ ambjentali huwa importanti daqs dak finanzjarju u għaldaqstant għandu jkun ukoll soġġett għal proċess tal-verifika.

BOV to share its experiences in investor relations

The Bank of Valletta CEO Mr Charles Borg has been appointed Director of the World Savings Bank Institute. This was reported by the timesofmalta.com early this afternoon.

It is always a pleasure to note the increasing number of Maltese professionals who are recognised on a global level for what they are worth.

In particular Mr Charles Borg will be able to share with the global community the experience of BOV of dealing with its clients. It is such a rewarding experience as can be amply confirmed by investors in the La Valette Multi Manager Property Fund.

Reflections on an Environment Policy

The current debate on what should form part of a National Environment Policy is a healthy exercise. It is focusing not only on the different aspirations of each citizen but also on the role of each one of the towns and villages which together constitute this country.

The environmental issues we face are the result of the manner we organise our lives both individually and as a community. In fact it can be safely stated that the manner in which economic activity has been organised throughout time has created different environmental and social impacts.

The exercise at this point in time is hence the clear identification of these impacts and subsequently seeking the best manner in which they can be tackled. This is done on two fronts: firstly through the formulation of an environment policy and secondly by integrating this environment policy with economic and social policy within the National Strategy for Sustainable Development (NSSD).

The NSSD has already been formulated and approved by Cabinet almost three years ago after a long process of consultation. It established targets and objectives which have unfortunately been ignored by the same Government which has approved them. This necessarily leads to the conclusion that these exercises can be a waste of time as their only purpose seems to be an exercise to prove that the new hands on deck can do things in a better way than those they have replaced. 

The National Environment Policy Issues Paper identifies a number of areas which are to be tackled but excludes a number of important ones. What is in my view objectionable and bordering on the insulting is the ignoring by the Issues Paper of the NSSD. It also ignores matters which have been tackled by the NSSD as well as the specific targets identified. This the NSSD did after extensive consultation with civil society, which the Issues Paper promises to go through again.

 

Eco-taxation

One such case refers to the use of economic instruments to attain environmental objectives. The Issues Paper queries whether and to what extent there is agreement  with the use of such instruments to further environmental objectives. Simultaneously with the publication of the Issues Paper, Finance Minister Tonio Fenech through the pre-budget document was lauding the idea of introducing a carbon tax and the possible utilisation of the proceeds to affect a tax shift. This is in the spirit of the former EU Commission President  (French Socialist) Jacques Delors’ 1993 EU White Paper entitled “On growth, competitiveness and employment. The challenges and ways forward into the 21^st century”.

So whilst the Environment Ministry is requesting our opinion on the use of eco-taxation (and other instruments) it seems that the Finance Ministry is dead-set to proceed.  Do these two Ministries form part of the same government? 

Both the Environment Ministry and the Finance Ministry would do well to go back in time to the debate on the introduction of the eco-contribution (2003-05) where they could identify a number of issues raised by civil society.

Should fiscal objectives be the purpose of environmental taxation or would it rather be environmental improvement? All over the globe governments declare that their aim in applying eco-taxation is environmental improvement. Yet they resist transferring political responsibility for environmental taxation from the Finance Ministry to the Environment Ministry. Such a move would lend credence to statements on the environmental objectives of eco-taxation and would ensure that the design of specific measures is more in line with encouraging changes in behaviour. Retaining political responsibility for environmental taxation at the Finance Ministry on the other hand signifies that the objective is to tax behaviour but not  to change it. This reluctance is generally reflected in the manner  in which eco-taxes are designed. Fiscal policy makers pay attention to the fact that changing behaviour would mean drying up a source of revenue. Hence eco-taxes designed for fiscal objectives are intended not to affect the elasticity of demand. This is done by selecting items in respect of which there are no alternatives and thus irrespective of tax added to the price there is no alternative to purchasing the product or service. The eco-contribution exercise clearly illustrates this argument.

 

Environmental nuisance 

The Issues Paper has failed to project an understanding that environmental issues can be most effectively tackled at a micro-level. In fact the Issues Paper adopts an exclusively macro approach and does not give any weight to the real life issues. Issues of environmental nuisance are the ones which the man in the street feels strongly about. These include primarily noise, air quality and odour nuisance caused by neighbours in residential areas. They could range from an air conditioner fixed below your bedroom window to a neighbour’s fireplace chimney spewing smoke right into your living room or a bakery belching black smoke onto your washing line. Or the newly opened restaurant or snack bar in a transformed ground floor flat whose operator wouldn’t care less about where the odours from his kitchen end up.    

Information

Access to environmental information is an important aspect of environment policy. Yet the drafters of the Issues Paper ignored it. The environmental information aspects of the Åarhus Convention have been incorporated into Maltese legislation as a direct result of Malta’s EU accession. This legislation provides a mechanism through which the citizen requests the release of information which up till then would be withheld by the authorities. This is a very primitive form of governance. The state should release information without having its hand forced to do it. This is the minimum required in an age of transparency and accountability. 

Policy proposals and other initiatives must be buttressed by studies which not only justify the proposal or initiative but which also identify the resulting impacts and the manner in which these can be addressed. Studies must be published at an early stage and not in the final stages of a discussion. Otherwise the public debate cannot be fruitful.

Transparency and accountability

Transparency and accountability are not only duties of the state. They are also a responsibility of private enterprise.  Corporate Social Responsibility (CSR) reporting is one way in which private enterprise informs the public on its activities. It is a function as important as financial reporting. Financial reporting having been accepted by society for quite a long time as a reporting requirement.

In Malta currently two companies publish a CSR report. Vodafone (Malta) and Bank of Valletta (BOV) have already published two editions of their CSR report. There has been considerable improvement in the information made available by Vodafone (Malta) in its second report, but BOV’s reporting  can be substantially improved.

The environment policy should identify the type of organisations that should have the duty to report publicly and on a regular basis on their environmental and other impacts. By organisations I understand not just industry and business but also public corporations, government departments and local authorities. A reasonable first step would be for companies quoted on the stock exchange to take the lead followed by public bodies such as Enemalta, Water Services Corporation, Heritage Malta and Air Malta.

CSR reporting should be guided by international standards such as the Global Reporting Initiative G3 guidelines and should be subject to auditing in order to verify that the statements made reflect what the organisation is really up to. 

Alternattiva Demokratika, AD, the Green Party in Malta has earlier this month published a document in reply to the National Environment Policy Issues Paper which lists and discusses the areas missed out by the said Issues Paper.  In addition to focusing on the urgent need to implement the NSSD, environment information, environmental nuisance and environment information it also points out the need to tackle the uptake of environmental management systems such as ISO 14001 and the Eco-Management and Audit Scheme (EMAS) Regulations of the European Union, light pollution, contaminated land, environmental and sustainability planning at a locality level better known as Local Agenda 21,  the role of civil society and environmental NGOs in environment policy and environment  research.  

We hope that when the environment policy is drafted it will include the widest possible list of issues and will tackle them in an holistic manner keeping in mind the parameters established in the National Sustainable Development Strategy.                 

Alternattiva Demokratika considers that environment policy is one of several instruments through which improvement in the quality of life can be attained. Protecting the environment signifies that we better our quality of life. It also signifies that each one of us acts in a responsible manner. However primarily it must be government which leading the way should act in an appropriate manner in order that it leads by example.

 published in

The Independent on Sunday, October 17, 2010, Environment Supplement

BOV’s CSR : The next step

This was originally published on the 5 January 2008 as an article in The Times

BOV’s CSR: The next step

by Carmel Cacopardo

 

Bank of Valletta is to be congratulated on the recent publication of its second Corporate Social Responsibility Report covering 2007.

In its mission statement BOV defines its commitment as being that of playing a leading and effective role in the country’s sustainable development “whilst tangibly proving ourselves to be responsible and caring citizens in the community in which we operate”. The objective of the CSR report is hence that of informing the community as to the manner in which the bank is acting as a responsible citizen. The bank’s CEO makes this even more clear in his statement on page four of the report. In fact, he rightly underlines that while the bank is responsible towards its shareholders it is also accountable towards society.

This is the crux of CSR: the accountability of business towards all stakeholders, the community at large. Profits generated on their own are not a measure of success, as the business of business is not just business!

The bank has ploughed back into the community 1.31 per cent of its profits (Lm350,000 or €815,500) through engagement in seven pillars of activity, namely the arts and culture, heritage, environment, sports, social, education and business sectors.

In particular, BOV has assisted Heritage Malta in preserving the Tarxien Temples. It has furthermore supported the restoration programme at Palazzo Falson, Mdina.

Reading through the BOV 2007 CSR report one encounters many a positive note as to the manner in which the bank is being eco-efficient. First on the list is its Santa Venera centre which, through both design and operation, is energy-efficient. Its Marsascala branch has, during 2007, been equipped with photo-voltaic panels, thereby contributing to an annual reduction of three tonnes of CO2 emissions as a minimum. The other branches await their turn.

BOV recycles its paper and has taken the first steps which will eventually lead to a paperless administration. Furthermore, it makes use of recycled toners and cartridges, not only contributing to less waste going to landfill but also paying less eco-taxes as a result. Reducing environmental impacts has a positive financial impact too!

The BOV report does not mention the environmental impacts generated by the use of transport (by both the bank and its employees). Nor is any reference made to the use of water in its branches, including the collection and utilisation of rainwater.

BOV has also sponsored a number of environmental initiatives aimed at the environmental education of the community.

While BOV is setting a good example which should filter through the business community, this should be seen as only a first step. In addition to improving the management of its direct environmental impacts, thereby reducing them, BOV can move forward, in the process retaining its leading role in banking CSR in Malta.

BOV should, on the basis of this eco-efficient experience, move on to new initiatives that address the eco-effectiveness of the banking system. In addressing its corporate responsibilities, BOV as any exemplary citizen would undoubtedly ask whether its services are being misused. In particular, whether any of its customers have used its services to contribute towards the ever-increasing national environmental deficit.

It would be interesting if in a future report we could read about environmental criteria applied in the consideration of requests for business loans, including those utilised to finance the construction industry. Additional interesting information would be whether BOV has refused its services to any client on the basis of environmental criteria.

The financial balance sheet on its own does not measure progress. It is only concerned with profits. The environmental and social balance sheets need to be addressed too, thereby having a “triple bottom line” approach to measuring progress.

Through its 2007 CSR report, BOV has proven that it is serious about managing its direct impacts. It now needs to move further by managing its upstream and downstream impacts. Managing its upstream impacts signifies addressing the environmental impacts generated by its suppliers – hence the introduction and maintaining of a green procurement service. Managing its downstream impacts would address the environmental impacts of those using its services. When this is done successfully BOV would be eco-effective, as a result contributing to a reduction of Malta’s environmental deficit.

BOV has taken the lead. I hope others will follow because profits and principles can co-exist.