Govt agencies, stat boards can help raise green standards

Besides banks, government agencies and statutory boards must also do their part in raising environmental standards ("Banks get guidelines for responsible lending"; Oct 9).

For instance, government tenders for furniture supplies should include a clause or declaration that the furniture is sustainably produced.

When evaluating bids for government or statutory board turnkey projects, the select committee should include a points system on how the main contractors participating in the bids and their subsequent sub-contractors source their materials, in line with responsible environmental practices.

All stakeholders must realise that it requires a consolidated effort to raise environmental standards and harness the opportunities presented by the "greening" industry.

Stricter environmental regulations can force companies to invest in environmentally friendly technologies and pollution-control measures.

In the banking sector, it is impossible to propose a standard way of dealing with environmental risks.

Because different people understand environmental risk differently, banks would have different ideas of what constitutes an environmental risk. As a result, banks may also treat environmental risks in a different way.

Still, banks can play a crucial role in this area. Environmental risks can have a negative impact on economic capital, and it is the function of banks to make sure that economic capital is shielded from such effects.

In the end, it is how banks recognise sustainable operations, sustainable lending and options for customers to choose greener services - such as automatic payments, paperless statements and bills, as well as electronic and phone banking - that will matter.

Francis Cheng