Office of Strategic Environmental Management
Financial Markets Workgroup
Note: EPA no longer updates this information, but it may be useful as a reference or resource.
Related EPA Links
- Environmental Financial Advisory Board
This group of prominent experts advises the EPA Administrator and Program Offices on "how to pay" questions for environmental protection.
For the past several years, EPA has been working with representatives of the financial sector to explore the link between financial and environmental performance. These partnerships examine whether using environmental information to make investment, underwriting, and lending decisions is a smart way for companies to try to improve long-term returns. They also examine whether environmental investment criteria affect companies environmental protection strategies.
Since its founding in 2004, the workgroup has concentrated on three main activities:
- Conducting research and developing reports on how the financial services industry views and uses environmental information
- Determining how EPAs information can be more useful to the financial sector
- Leveraging the expertise of financial sector representatives and senior corporate environmental managers through partnerships
The workgroups research and reports analyze from different angles the market value of good environmental management and performance. Topics examined include the financial implications of climate change risk, European green investing practices, the market value of environmental management systems (EMSs), financial accounting standards for environmental liabilities, and how useful the financial sector finds common frameworks for corporate disclosure of environmental information.
The workgroups partnerships focus on finding ways to make EPAs environmental information more useful to the financial sector. Early on, these partnerships consisted largely of roundtables and other events focused on information dissemination and exchange. Today, the workgroups partnership activities consist largely of small groups. They focus on determining what specific types of environmental data are of greatest interest to the financial sector and identifying the specific steps EPA can take to make its data more useful to the financial sector.
Environmental Financial Advisory Board Recommendations
To guide its work, the workgroup sought advice from EPAs Environmental Financial Advisory Board (EFAB). In 2008, EFAB reviewed the workgroups EMS work and strongly endorsed it. EFAB also produced a report with recommendations for broadening the workgroups focus. Specifically:
- Taking a leadership role in working with the financial sector to better understand the relationship between environmental performance and financial value
- Working with the financial sector to develop environmental performance measures or categories of data that would be most useful to their work
- Identifying all the relevant environmental performance information collection systems within EPA
- Contacting environmental regulators and organizations in Europe, Japan, and Australia to learn how they collect environmental performance information for financial market analyses and decision-making
- Coordinating the development of environmental performance measures with other U.S. federal agencies, such as the Securities and Exchange Commission (SEC), the Occupational Safety and Health Administration (OSHA), and state environmental regulators