The world bank groups standards for ensuring environmental and social sustainability are considered to be of the highest order and are models for many international private and public agencies. The equator principles, launched in 2003, were updated in 2006. The equator principles environmental and social risk. On june 4, 2003, ten leading banks from seven countries announced the adoption of the. Eps were first revised in july 2006, to align it with the ifc performance standards april 2006. The equator principles make a distinction between three types of projects. Ten large international banks launched the initiative in 2003 ifc played a facilitation role. Banks commit to apply this framework to all projects with a capital. Further revision of ifc performance standards in 2012 and the need to strengthen environmental and social risks management, resulted in the launch of third version of the eps ep iii.
Updated in july 2006, these state that equator principle finance institutions epfis will ensure they only provide finance to projects that are developed in a manner that is socially responsible and reflect sound environmentalmanagement practices. Reflecting this, in june 2003 10 major international banks adopted the equator principles, a voluntary set of guidelines. It is primarily intended to provide a minimum standard for due diligence and monitoring to support responsible risk decisionmaking. Today, there are fortyfive banks who have adopted the ep, comprising over 80% of the project. In 2008, the industrial bank of china adopted the equator principles, making it the first financial institution adopting the principles in china. The equator principles have been presented as ta base level industry approach for financial institutions to use when determining, assessing and managing environmental and social risk in project financing. The principles were adopted by ten banks, then updated in.
The equator principles and project risk the equator principles provide a. In addition to project financing, this will include prefinancing,bridging facilities and projectrelated financing. The equator principles ep are a voluntary code of conduct for assessing, managing and reporting environmental and social impacts in project finance. Key epiii categorisation, industry, country and other details are recorded through the loan pipeline system. Three years after the first announcement of the equator principles in june 2003, the number. The industrial bank manages the environmental and social risks of eligible projects according to the requirements of equator principles and scales it to five industries with excess capacity. An industry approach for financial institutions in determining, assessing and managing. Equator principles financial institutions epfis have. Equator principles iii reporting principle as well as aligning with the groups esg commitments and embedding epiii assessment in the loan decision process. Implementation of the equator principles at banorte the equator principles and risk management in 2009, banorte signed an agreement with ifc under which it committed to establish its own system of environmental and social risk management. I hope to shed light on this debate by examining a specific standard. The equator principles, launched in 2003, were updated in 2006 and then in june 20. This practice note provides an overview of the equator principles eps, ep ii or ep iii, which the international finance corporation ifc introduced in 2003 and which have become the industry benchmark by which banks and financial institutions determine, assess and manage.
Evaluation of compliance of the baku tbilisiceyhan btc. In june 2003, a group of major financial institutions adopted a set of voluntary guidelines known as the equator principles with the intention of creating an industry benchmarking for assessing and managing environmental and social issues in the project finance sector. The equator banks represent approximately 80 percent of the. The equator principles ep are a voluntary set of standards adopted by financial institutions for determining, assessing and managing environmental and social risks in projectrelated transactions. Equator principles do not create any rights in, or liability to, any person, public or private. Financial institutions epfis from 37 countries have adopted the equator principles. The equator principles ep were launched in 2003 based on the international.
This is emerging from aaibs keenness on complying with the ep governance and annual reporting rules introduction in 2003, arab african international bank has spontaneously started giving back to the. Rbc was the first canadian bank to sign the equator principles in 2003, and we recommitted to the revised principles in 2006 and in 20. The ehsguidelines are technical reference documents containing e xamples of. This paper analyses the compliance of the 79 equator principles financial institutions epfi with the seven mandatory requirements. If you wish to optout of receiving marketing emails or phone calls from altisource please send us an email to. They are a voluntary framework providing guidelines for assessing, managing, and reporting environmental risks in project. Symposium 10 years equator principles fragment of a. Scotiabank is a member of the following organizations.
The equator principles eps were thus formulated in june 2003. This inclusive approach also allows eiris to look beyond the equator principles to analyse companies involved in project finance who have not adopted the equator principles. Pdf the equator principles are a transnational corporate social. They are an evolving initiative, which has adapted over time to address the growing expectations from a wide range of stakeholders. This equator principles report is covering aaib project lending operations between the period november 2014onwards continuous projects. Uk green investment bank plc gib formally adopted the equator principles ep on 2nd. Environmental and social risk in project financing, july 4, 2003 refer appendix 1. Inclusion of stronger soc ioenvironmental standards as. The equator principles form a significant and crucial part of citigroups overall global corporate and investment bank gcib environmental and social risk management policy. Are the equator principles greenwash or game changers.
Equator principles ep a basic framework for the management of social and. The equator principles apply globally and to all industry sectors. Since 2003, forty private project finance institutions have made voluntary commitments to abide by a set of principles designed to ensure that the projects they finance are developed in a manner that is socially responsible and reflect sound environmental management practices. Investigating compliancenon compliance with the equator. In compliance with the canspam act of 2003, each marketing email transmitted by the sites has instructions for opting out of receiving future emails. Equator principles corporate social responsibility and. Equator principles of 2006 a set of voluntary guidelines for assessing and managing social and environmental risks to project financing an initiative from the banking and financing sector first initiated in 2002 by various banks and the world banks international financing corporation. The equator principles, were introduced in 2003 and revised in 2006 and again in 20to the current third version.
More than 90 banks and financial institutions have voluntarily adopted the equator principles, which are based on ifcs performance standards. Equator principles implementation october 2019 the equator principles are adopted by financial institutions to assess, monitor and report environmental and social risk in project finance, project financerelated corporate loan investments and bridge loans. It should be noted that epfis report at different times in the calendar year based on their institutions reporting period and the equator principles association. Overview of international mine closure guidelines1 dawn h. The equator principles, launched in 2003, were updated in. The equator principles eps, launched in 2003, are a financial industry. Symposium 10 years equator principles fragment of a normative sustainability order or business as usual. Project finance during 2018, bmce bank of africa provided funding for one qualifying category b equator principles project finance.
The equator principles are a voluntary set of guidelines that help financial institutions identify, assess, manage, and mitigate environmental and social risks in projects. This chapter will focus on an overall assessment of implementation of the equator principles eps based on survey research from participating banksequator principle. The equator principles eps, launched in 2003, are a financial industry benchmark for managing environmental and social risks see. The equator principles consist of three categories.
Equator principles overview established in 2003, the equator principles ep are a financial industry benchmark for determining, assessing and managing environmental and social risks in projects. Ten teenage years of implementation and a search for outcome olaf weber and emmanuel acheta 5 of an adolescent still seeking to establish relevance in an atmosphere of flux and uncertainty. However, given the general lack of enforcement and the fact that. Longterm sustainable value creation is a key priority in our overall growth strategy, and is a term that you will see in our annual report, as well as here in. In june of 2003, ten financial institutions signed on to the equator principles ep, a set of voluntary social and environmental guidelines governing global project finance transactions. It is primarily intended to provide a minimum standard for due diligence and monitoring to. The eps were created in 2003 by epfis equator principles financial institutions in consultation with the international finance corporation ifc. The equator principles ep were launched in 2003 on the international finance corporation performance standards on social and environmental sustainability and on the world bank group environmental, health, and safety guidelines. This paper shows that as of november 20, epfis have increased from the original 10 founding members to 78 members, which. The equator principles apply the four financial products described belowto when supporting a new. A total of 15 new project finance deals in emerging markets were screened in 2012 for their compliance with the principles. Indeed, part of the value of csr is that it promotes longerterm thinking and a more robust approach to risk management. Paribas and the credit committee stage for financing documents to regularly demonstrate its. In addition, epiii categorisation, compliance and details of key esg risks and.
The equator principles financial institutions epfis have consequently adopted these principles in order to ensure that the projects we finance are developed in a manner that is socially responsible and reflect sound environmental management practices. Financial institutions adopt and implement the equator principles voluntarily and independently, without reliance on or recourse to the ifc, the world bank group, the equator principles association, or other epfis. Principles equator principles iii,which will apply to a wider range of financing products. Each equator bankreports publicly, at least annually, about its equator principles implementation processes and data of transactions as stated in equator principles annex b. The ehsguidelines are technical reference documents containing examples of. Equator principles implementation green investment group.
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