Faculty of Law University of Toronto
Globalization, Law & Justice Workshop Series
presents
Cynthia Williams
Osgoode Hall Law School, York University
Global Banks as Global Sustainability Regulators: The Equator Principles
Thursday, December 6, 2007
4:10 – 6:00
Solarium (room FA2), Falconer Hall
84 Queen’s Park
One of the profound shifts in global regulation and regulatory theory in recent decades is from conceptualizing international law as primarily state-initiated, treaty based and public to understanding it as a transnational framework composed of evolving hybrids, created by both public and private entities, composed of networks of treaties, domestic law, voluntary standards and codes of conduct, certification procedures, best practices and norms. This interdisciplinary project, applying insights from anthropology, business, law, organizational psychology and sociology, will examine one aspect of this process in depth to develop the factual basis by which to inform theory about this ongoing transformation in the making of transnational regulation. This project focuses on the Equator Principles as a case study illuminating the reconfiguration of transnational governance. The Equator Principles is a voluntary initiative that comprises a common framework global banks and other financial institutions have developed for evaluating and managing social and environmental risk in privately-financed development projects valued over $ 10 million, including requirements for environmental and labor protections, community health, safety and security, community consultation throughout the project, and dispute resolution systems. As of November 1, 2007, fifty-six global financial institutions, comprising approximately 85% of world project finance capacity, have agreed to be bound by the Principles, including the following Canadian banks: the BMO Financial Group, CIBC, Manulife Financial, RBC, Scotiabank and TD Bank (Canada Trust) Financial Group are all participants. Moreover, in a number of global banks (such as Barclays, HSBC and JP Morgan Chase), participation in the initiative parallels or has catalyzed profound change within the firm, such that the Equator Principles social and environmental standards will be applied throughout the bank’s products (including commercial lending and underwriting), and in a range of industries, such as agriculture, energy, forestry, maritime and extractives, including oil and gas and minerals. This research project, in early stages, seeks develop an empirical basis for a rich description of how “new governance” standards get translated into firm practices and affect the culture of the firm. Theoretic contributions include exploring the management processes by which the banks’ commitments are being propagated within the organization; examining the underlying psychological processes by which employees become engaged with the Equator Principles and the effects, if any, on job performance, commitment and trust in the employing organization; modeling how cultural change occurs within organizations; and developing the implications for our theories of regulation and law, including examining the efficacy of new governance, market regulation, and regulation within industry groups as contrasted with more traditional, external, state-initiated regulation.
Refreshments will be served.
For more workshop information, please contact Nadia Gulezko at n.gulezko@utoronto.ca
