How should banks govern the environment? Challenging the construction of action versus veto

Abstract Over the last two decades, banks have been developing environmental credit risk assessment policies and procedures. Today, even NGOs who had been at the forefront of campaigns naming and shaming bad practices acknowledge banks are taking environmental risk management seriously. Nonetheless, they now challenge banks to go further, advocating a ‘no harm’ approach based on a so‐called ‘veto’ of investments. The author draws a post‐structuralist position on risk perception to argue a characterization of environmental governance in terms of action and veto may mislead debate. Instead, the author proposes the starting point for debate on the part banks can play in governing the environment lies in mutual agreement on precautionary action. Copyright © 2007 John Wiley & Sons, Ltd and ERP Environment.