The Dalmatian Coast constitutes a unique patchwork of marine, coastal, island, terrestrial and agricultural ecosystems with great variations regularly occurring over small distances. The biodiversity and landscape diversity have been in rather good shape compared to some other Mediterranean regions. However, recently this globally significant diversity is generally threatened by unsustainable elements in the main economic activities in the area, which include firstly real estate development and tourism but also agriculture and fisheries/mariculture. The "COAST" project focuses the problem of biodiversity and landscape protection and conservation in Dalmatia within a multi-disciplinary and multi-sectoral context of Integrated Coastal Management (ICM). Land in the project area is characterized by: (i) regular changes in land use over short distances, i.e. the mosaic pattern consists of very small patches, and (ii) the fact that the vast majority of land is dedicated to low-intensity agriculture. This means that almost all land outside of the urban areas and tourist developments provides a habitat for biodiversity. In terms of species diversity, the project area includes known 2,187 vascular plant taxa, of which 165 are endemic. The area is home to at least 125 species of fauna from the Red Book and at least 70 species strictly protected under the Bern Convention. As throughout the Mediterranean region, the introduction of farming and livestock systems over 3,000 years ago led to a change and increase in the biodiversity. Over the millennia, these low-intensity farming practices created unique habitats, integrating forest, pasture and cropland, and providing a home for a unique set of species. This included the arrival of predators feeding on livestock, birds dependent on agriculture, and unique associations of floral diversity. These complex mosaics have now largely disappeared from other Mediterranean regions – being replaced by industrial agriculture, urban land or climax vegetation - but are still present in the project area and throughout Croatia. The traditional agriculture in Croatia, which incorporates green hedges, rubble walls, small natural ponds and natural paths are essential to the ecosystem, to the habitats and to many of the species in the region. Examples of species benefiting from this include orchids, endemic turtles and endemic wall lizards. This diversity of ecosystems, habitats and land-use constitutes a unique overall landscape and seascape diversity, which represents the important basis for the area’s outstanding attraction to tourists. The biodiversity in the project area remains poorly surveyed and documented. In many sites in the area, surveys regularly lead to the discovery of new species. These surveys suggest the wealth of species waiting to be discovered, both inside and outside of Protected Areas, and also suggest that there are impressive levels of endemism. Therefore, the overall objective of the COAST project is to ensure that the development path of the Croatian coast is environmentally friendly, with the conservation of biological diversity firmly mainstreamed into that development path.
More specifically related the subject of this TOR, it is obvious that banking and general financial sector is important stakeholder in shaping development path of some region by means of its influence on the flows of investments. Consequently, influencing environmental and social assessment procedures in the banks and FIs is one of the main instruments available for mainstreaming of biodiversity and general sustainability concerns into the development path. On the other side, this is also critical for the soundness of the FIs operations, as growing general public awareness of social and environmental aspects of the developmental projects is increasing both its exposure to risks related to participation in the projects which are perceived as socio-environmentally un-responsible; and its potential benefits resulting from its early involvement in the growing sector of so called Pro Biodiversity Businesses (see e.g. European Initiative on Business and Biodiversity, 2007; UNEPFI A Document of Biodiversity and Ecosystem services work stream 2008; RSPB (from EU funded BTAU project) Handbook for developing and implementing pro-biodiversity business projects 2009; IUCN, Building biodiversity business, 2008; UNDP, 2003, Local business for Global biodiversity conservation). However, although environmental and social issues often can be sources of both unexpected financial, legal and market liabilities and unexploited opportunities for the clients of FIs, and thus for the FIs themselves, FIs often experience problems implementing appropriate environmental and social risk management policies and procedures due to a variety of constraints. The principal constraints most often relate to the relatively low awareness of, and commitment to, environmental and social performance, within FI management, and management’s concern that such risk management activities are “cumbersome” and “not worth the effort”. Brief analysis of the situation in Croatia has shown that although quite a few banks in Croatia – including the HBOR – have become aware of the concept and major existing initiatives dealing with environmentally and socially responsible banking practice, these practices still have to be fully developed / elaborated and mainstreamed / integrated into banks’ standard daily operation. Situation is similar with the Croatian finance sector support to Green business: declaratively everyone recognizes that economic development that protects and sustainably uses biodiversity / landscape uniqueness of the area as its comparative advantage is the strategic choice for development in the region, and therefore the soundest type of investment for FIs, however there is a lot of space for improvement, by developing more systematic and effective implementation schemes at operational level. Objectives of the assignment The objectives of the assignment are to inform Croatian banks / FIs (senior managers of their risk assessment departments) about the currently adopted principles and best practice in the relevant INTERNATIONAL CONTEXT, related to: - Effective environmental and social risk management systems, which allow financial institutions to better manage risks, take advantage of opportunities, enhance their environmental and social performance and reputation, and lead to improved financial performance;
- How environmental and social risk management can be readily integrated into the normal risk management process and the public resources available to bank staff to do so.
- Green / BD businesses as a great, however still mainly unexploited potential and therefore strategic choice for sustainable development in the Croatian coastal area.
- Possibilities of investment in Green business sector through Green Business Support Programme (GBSP) established through the Project COAST, within the County development agency within the four Dalmatian counties.
The activity should build on the results of previous related activities, primarily: - HBOR Questionnaire / Checklist related to the environmental aspects of the projects (see “Upitnik o zaštiti okoliša” at www.hbor.hr/fgs.axd?id=664), developed through its previous cooperation with EBRD, and ), developed through its previous cooperation with EBRD, and
- Wider framework of Corporate Social Responsibility for Banking Sector in Croatia, established through the previous project dealing with responsible relationship with the bank’s small clients, implemented in partnership by Croatian Banks Association (HUB) and UNDP.
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