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Environmental governance in international banking: exploring the emergence of the Equator Principles

Wright, Christopher (2008) Environmental governance in international banking: exploring the emergence of the Equator Principles. PhD thesis, London School of Economics and Political Science.

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Voluntary business regulation at the transnational level is becoming a significant feature of global environmental governance. The thesis considers the origins of the Equator Principles, a voluntary code of conduct created by commercial banks to manage environmental and social risks associated with project financing in developing countries. Based on the operational policies of the International Finance Corporation (IFC), the framework has thus far been adopted by over 60 commercial banks since its launch in June 2003, representing over 85 percent of the global project finance market. The thesis argues that the rise of private environmental governance in the commercial project finance market is closely linked to the emergence and diffusion of environment and social norms in the international system. It traces the normative origins of the Equator Principles to the theory and practice of environmental project review first institutionalized at the World Bank in the early 1970s, then later expanded and applied to the IFC's private sector projects as well. The thesis argues that the rise of a corporate accountability movement in the financial sector was the principal reason why commercial banks decided to collaborate and create a common industry standard based on environmental and social norms institutionalized in multilateral institutions. It makes three main contributions to our understanding of private environmental governance formation. First, the power of transnational advocacy groups to influence corporate behavior is determined by the legitimacy of the norms they promote as well as political opportunities presented by market structures. Secondly, international organizations are increasingly facilitating and legitimizing voluntary business regulation as the most effective institutional form of governance for integrating public interest concerns into transnational markets. And third, voluntary business regulation, such as the Equator Principles, is positioning private actors and forms of authority at the center of transnational rule-making processes, producing systems of rules that both challenge and reinforce international law, regimes and institutions.

Item Type: Thesis (PhD)
Uncontrolled Keywords: Political Science, International Relations, Business Administration, Banking, Environmental Law
Sets: Collections > ProQuest Etheses
Departments > International Relations

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