Environmental Risk Management

Environmental Risk Management is a crucial aspect for commercial lenders, as it helps mitigate potential financial, legal, and reputational risks associated with environmental issues. Lenders need to assess and manage these risks to protect their portfolios and comply with regulations.

Lenders should adopt an Environmental Risk Management policy to gain a better understanding of the potential environmental risks associated with the properties or projects they are financing.

Desk Top Review:
- A preliminary assessment that utilizes available information, maps, and documentation without physical site inspections.
- An Environmental Professional summarizes findings and offers recommendations, ensuring a concise understanding.
Record Search with Risk Assessment (RSRA):
- A more extensive Desktop Review mandated by the Small Business Administration for loans greater than $250K.
- In-depth investigations, including government database searches and borrower-prepared questionnaires, provide a comprehensive risk assessment.
Third-Party Report Review:
- Thoroughly evaluate reports for compliance with industry standards and correct findings.
- Crucial for assessing environmental risks and enhancing the credibility of data and recommendations.
Environmental Due Diligence:
- Transaction Screen, Phase I ESA, and specialty surveys for asbestos, lead paint, and mold.
- Identifying potential environmental conditions and providing comprehensive reports with recommendations.
Environmental Risk Management Team Training:
- Training loan officers, underwriters, and relationship managers to understand bank policies and procedures.
- Saves time and alleviates delays allowing any potential environmental issues to be mitigated prior to closing