Published in Manila Bulletin, August 5, 1999

The Manila-based Association of Development Financing Institutions in Asia and the Pacific (ADFIAP) signed yesterday a memorandum of agreement with the United States-Asia Environmental Partnership (US-AEP) designed to promote the concept of "environmental due diligence" in bank lending.

The two organizations agreed to be the primary provider of new training programs that are expected to improve environmental risk processes in development financing institutions across Asia.

The objective is to impart that the practice of environmental risk management in banks is not only part of good corporate citizenship but also a fundamental aspect of sound business management since the environmental risks of a borrower can become the risks of the bank.

The agreement supports ADFIAP�s "Greening of DFIs" project which promotes the member-banks adopting a written environmental policy for their operations and designating bank officers responsible for environmental affairs.

Founded in 1976, ADFIAP has 78 member financing institutions in 33 countries. The US-AEP is an initiative of the US Agency for International Development (USAID) dedicated to the objective of promoting a "clean revolution." A major US-AEP activity is to encourage environmental due diligence among banks, investment companies and insurance organizations in Asia.

The agreement was signed by Orlando P. Pe�a, ADFIAP Secretary- General and Peter Kimm, Executive Director of US-AEP. Russ Thirkell, Regional Program Manager for the Institute of International Education, prime contractor of US-AEP for implementing the activity, witnessed the signing.

Kimm said the combined training research of ADFIAP and US-AEP "represents a prime opportunity for banks to gain from powerful profit tools while also helping Asia improve industrial environmental performance."