סמינר מחלקתי - הרצאות מחקר - תואר שני

The Equator Principles ("EP") is a voluntary program. It is a global network of leading financial institutions, which purpose is to provide its members with a framework of credit risk management regarding environmental and social risks. The research question is whether international financial institutions that are members of the EP are expected to demonstrate better environmental performance than non-members. In the context of this research, the term “better/improved environmental performance” refers to involvement in fewer projects of adverse environmental impact. The theoretical framework of the research discusses the potential of the EP process to create improved environmental results. The institutional design of the EP (i.e. the formal structure of the EP and formal requirements from candidates) is analyzed, based on literature on voluntary environmental programs, in particular about environmental management systems.

The independent variables: (a) 46 EP members (“EP group”); (b) 58 non-members (“the non-EP group”).

The dependent variable: “Environmental performance” – involvement in financing of 53 controversial projects worldwide, over the period 2002-2013. 

The research question is tested through 3 hypotheses:

HA tested the total amount of controversial deals concluded each year by the EP group and the non-EP group. The results show that EP members are involved in more controversial deals than non-members on an annual basis.

HB tested (through an independent sample T test) the effect of admission to the EP club by comparing the environmental performance of the EP group and the non-EP group, in annual average terms and relative to the size of the bank. Following the testing of HB, admission to the EP club was not found as having a significant effect on the amount of controversial deals in which EP members are involved, in comparison to non-EP banks.

HC tested (through a Wilcoxon Signed-Rank test) the effect of admission to the EP club, by comparing the environmental performance of EP members before their admission and following it, in annual average terms and relative to the size of the bank. Following the testing of HC, admission to the EP club was found as having a significant increase effect on the amount of controversial deals in which EP members are involved.

The results of this research, subject to its limitations, support previous studies about the EP, which presented some skepticism regarding the positive environmental influence of the EP. Some programs have more potential than others to create improved environmental performance. The potential and limitations of voluntary programs should be assessed according to the institutional design of each program.