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T1 Lenders and Investors Environmental Liability: How Much is Too Much?
A1 United Nations Environment Programme, 
K1 investment
PB United Nations Environment Programme
YR 2016
FD 2016
LK https://wedocs.unep.org/handle/20.500.11822/7521
UL https://wedocs.unep.org/handle/20.500.11822/7521
NO This working paper presents an overview of Lender Environmental Liability (LEL) and Investor Environmental Liability (IEL) regimes and issues. Environmental harm and degradation is often irreparable. Therefore, our assumption is that precaution is the main objective of any international and domestic environmental legal regime. The paper explores the conditions under which LEL/IEL can be effective tool to promote precaution. To illustrate our premise, we created a model based on Nash’s game theory in an attempt to universalize some basic concepts in the design of these systems. By using Nash’s game theory we aim to answer the question presented in the title of our paper: how much is too much environmental liability for a financial institution to bear? We argue that full environmental liability (where financial institutions bear unlimited liability) may have the perverse effect of incentivising them to internalize any duty of care, in case they bear full liability. - See more at: http://unepinquiry.org/publication/lenders-and-investors-environmental-liability/#sthash.RedL8yWr.dpuf
DS UN Environment Document Repository
RD Sep 17, 2026