The development and maintenance of an environmental policy can present a challenge for lenders and banking risk managers that do not have an internal environmental staff. The process not only includes a determination of the types and levels of due diligence that
will be required, but also includes the delineation of roles and responsibilities for policy execution and specific procedures to
follow based on the bank’s risk tolerance.
A good first step in policy development is bringing together key bank officers to discuss the major components of the policy and process.
An essential ingredient in policy development meetings is a set of specific questions designed to address the major aspects of an environmental policy.
These questions include the following:
| 1. | What levels of risk will be tolerated? |
| 2. | What levels of due diligence will be considered? |
| 3. | Who will review the environmental assessments? |
| 4. | What aspects of the process should be centralized? |
| 5. | When should the bank require reliance letters? |
| 6. | Who will enforce and who can waive the policy? |
Although there are many possible answers to most of these questions, ERI’s environmental risk management policy development team is available to meet with your bank to discuss the pros and cons of the various options and assist you in policy development and implementation. ERI has significant experience in addressing the specific concerns of a wide variety of key players who manage various internal banking operations, such as commercial real estate, corporate banking, business banking and special assets. This collaborative approach to policy development can lead to an efficient and streamlined environmental risk management program.