UK Export Finance Adopts the Equator Principles
London, 31 March 2016
UK Export Finance (UKEF) has announced that it has adopted the Equator Principles, a global framework to promote sustainable environmental, social and human rights decision-making in financing projects.
Louis Taylor, UKEF’s Chief Executive Officer, welcomed the move, saying:
‘In adopting the Equator Principles, UKEF joins export credit agencies and international financial institutions including numerous partner banks with which UKEF works frequently.
‘This global framework will give UK exporters supported by UKEF confidence that environmental, social and human rights issues, that may carry ethical or reputational risk have been given consideration as part of UKEF’s support to relevant projects. In adopting the Equator Principles, we do not anticipate any additional administrative burden to UK exporters applying for export finance support.
‘UKEF becoming an Equator Principles Institution is in line with the UK government’s drive to promote sustainable business practices following the agreement of the Sustainable Development Goals at the UN General Assembly last year.’
Since their introduction in 2003, the Equator Principles have enabled financial institutions to engage with stakeholders including non-governmental organisations and the private sector to converge on mutual environmental and social principles. With the Equator Principles adopted by over 80 financial institutions, they cover, according to the Equator Principles Association, 70% of project finance debt for projects in emerging markets.
Over the course of the next year, the Equator Principles will be incorporated into UKEF’s existing environmental, social and human rights due diligence processes, which also meet all the requirements of the OECD Recommendation on Common Approaches for Officially Supported Export Credits and Environmental and Social Due Diligence.
Notes for Editors
1. UK Export Finance – https://www.gov.uk/government/organisations/uk-export-finance – is the UK’s export credit agency. It supports long term economic growth and competitiveness by complementing the private market with insurance for exporters, loan guarantees to banks, and support for and provision of loans to overseas buyers of UK goods and services.
2. Guidance on how UK Export Finance processes applications, including environmental, social and human rights due diligence, is available here: https://www.gov.uk/government/publications/processes-and-factors-in-uk-export-finance-consideration-of-applicants
3. UK Export Finance has to date followed the OECD Recommendation on Common Approaches for Officially Supported Export Credits and Environmental and Social Due Diligence (OECD Common Approaches). The international benchmark environmental, social and human rights standards used by the OECD Common Approaches are those of the World Bank Group, including the International Finance Corporation (IFC) Performance Standards, as is also the case with the EPs.
4. The Equator Principles - http://www.equator-principles.com/ - is a risk management framework adopted by financial institutions for determining, assessing and managing environmental and social risk in projects.It is primarily intended to provide a minimum standard for due diligence to support responsible risk decision-making.
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