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financial firms ready to unveil ethical guidelines

October 2002

More best practice guidance for the financial services sector is to be unveiled next month.

The ‘Forge Two’ corporate social responsibility management and reporting guidelines have been produced by a group of eight European banks and insurance companies in the wake of the London Principles on Sustainable Finance, which were launched in September and signed by 11 companies (EP4, issue 4).

The guidelines have been out to consultation and will be finalized shortly. The UK’s CSR minister Stephen Timms will launch them on 5 November.

The Forge group includes Abbey National, Aviva, Barclays, Legal & General, Lloyds TSB, Royal & Sun Alliance, Royal Bank of Scotland and Zurich Financial Services.

The Association of British Insurers and the British Bankers’ Association were partners in the project, which was sponsored by three government departments, including the Department of Trade and Industry.

Non-governmental organizations, pension funds and unions were among those consulted, including Amnesty International, WWF-UK, the Universities Superannuation Scheme and banking union Unifi.

‘There is clearly a need for guidance for companies in this area, both for those at the forefront which wish to benchmark themselves with others ... and for those which have done less in this area and are keen to put in place a meaningful CSR policy,’ said Mary Francis, director general of the Association of British Insurers.

The Forge group published guidance for the financial sector two years ago covering environmental matters – hence the name Forge Two.

Barclays, Credit Suisse Group and Lloyds TSB are the European banks with the most advanced procedures for assessing environmental risk in their core lending practices, according to a league table published by the investment manager Friends Ivory & Sime.

The ranking, based on research with Strathclyde University, benchmarks the credit risk assessment procedures of ten banks held in the investment manager’s European portfolios.

HSBC, ING Group, Royal Bank of Scotland and Standard Chartered were judged to be in the ‘chasing pack’ when assessing environmental risk. Santander Central Hispano, Societe Generale and UniCredito Italiano were still ‘on the starting grid’.

The three leaders have ‘relatively mature and detailed review procedures, training systems and communications’, according to FIS, which added that credit risk assessment of banks’ social impacts was worth further study.




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