ABN AMRO Bank Finds Out if All Press Is Good Press

The World Environment Center awarded its 2006 Gold Medal for International Corporate Achievement in Sustainable Development to AMB AMRO Bank last night for its work on the Equator Principles, the first ever framework for incorporating environmental and social issues in private bank lending for large ($50 million and over) development projects.

The company’s commitment to those very principles lies at the heart of controversy surrounding involvement in the Sakhalin oil project in the Russian far east. Touted as “the world’s largest oil and gas project” by its developers, the project includes plans for two 500 mile pipelines as well as undersea pipelines valued at over $12 billion.

The Rainforest Action Network and others ran a full page ad in yesterday’s Washington Post (a popular tactic by both business and NGOs of late – see the May 10th BUSINESS-WATCH post), and planned a protest for last night’s awards ceremony.

A key issue here is assuring that companies abide by the principles and standards they commit to. A company that adopts the Equator Principles is supposed to “individually declare that it has or will put in place internal policies and processes that are consistent with the Equator Principles."

Without a credible enforcement mechanism, preferably monitored by an independent, external third party, business cannot expect its stakeholders to simply take their word on it in our post-Enron world.