China Green Finance Task Force Report: Lender Liability

Country Paper

Authors: Green Finance Task Force   

Published By: UNEP Inquiry    Research Bureau of the People's Bank of China   

Date: Apr 2015

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China Green Finance Task Force Report: Lender Liability

In the event of a project causing environmental damage, in many countries its commercial lenders can also face legal liabilities. This forces lenders to take environmental impact into consideration in making investment and financing decisions. This paper makes the case for establishing environmental legal liabilities for commercial banks in China and highlights steps to take to implement this:

  • Revise the Commercial Banking Law by stipulating environmental legal responsibilities in legal form.
  • Develop supporting regulations on the performance of environmental due diligence obligations for commercial banks.
  • Give environmental law enforcement departments with the right to sue commercial banks.
  • Create an environmental compliance system for commercial banks.
[NB: This paper is one chapter of the broader report “Establishing China’s Green Financial System” developed by the China Green Finance Task Force, which was convened by the Research Bureau of the People’s Bank of China together with the UNEP Inquiry]
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