Reputation
Financial institutions face reputational risks and damage to their brand by becoming involved in controversial investing. The financial sector is seen as a key point of leverage in either enabling or preventing biodiversity and ecosystem services loss. There have been various high profile media and NGO campaigns against financial institutions providing services and investments to companies with poor records.
Examples include the pressure put on those providing advisory services to the Initial Public Offering of the Samling Group on the Hong Kong Stock Exchange where the finance sector was accused by NGOs of lack of compliance with their environmental standards, in particular related to concerns about illegal logging. The Friends of the Earth report on investment in Asia Pulp and Paper ‘Paper Tiger Hidden Dragons’. Or the coverage of the environmental aspects of banks’ credit policies such as 'Mind the Gap' report by BankTrack.
CASE STUDIESReputational risk
