Sustainability and Environmental Risk Management in Canadian Banks and Financial Service Institutions – A Global Comparative Study

27 Pages Posted: 19 Nov 2010 Last revised: 28 Jan 2014

Date Written: November 19, 2010

Abstract

How do Canadian banks report about the integration of sustainability risks into corporate lending compared with their global peers and where are Canadian banks generally located regarding sustainability issues compared to their global peers? In this paper we report about the analysis of Canadian banks and financial institutions with respect to their sustainability performance. The qualitative and quantitative analyzes suggest that all analyzed institutions manage environmental risks in credit management to avoid financial risks. Some of the analyzed institutions even connect environmental and sustainability issues with their general business strategies. However, a disclosure of the monetary risks of environmental issues and the monetary benefit resulting from managing these risks are still missing. Thus it does not become clear to stakeholders to which amount the banks and financial institutions are at risk regarding environmental or sustainability issues. With respect to other sustainability issues than environmental risks in the lending business Canadian banks are performing well compared to their global peers. Only in the field of human rights and business ethics and product responsibility some of the five Canadian banks are not located in the top 10 per cent rank. Therefore it seems that there is a good basis for a further proactive behavior of Canadian banks and financial service institutions to establish and extend the sustainability lead.

Keywords: Sustainable Finance, Sustainable Banking, Sustainability, Credit Risk, Canadian Banks

JEL Classification: G21

Suggested Citation

Weber, Olaf, Sustainability and Environmental Risk Management in Canadian Banks and Financial Service Institutions – A Global Comparative Study (November 19, 2010). Available at SSRN: https://ssrn.com/abstract=1711869 or http://dx.doi.org/10.2139/ssrn.1711869

Olaf Weber (Contact Author)

University of Waterloo ( email )

Waterloo, Ontario N2L 3G1
Canada

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