About Equator Principles (EP III) Update Process and Timeline
The Equator Principles (EP) Association is committed to reviewing the EPs from time-to-time to reflect ongoing learning and emerging good practice. Since the launch of the EP framework in June 2003 and a subsequent revision in 2006, there has been significant growth in the number of EP adopters from the original 10 to 75 financial institutions from 32 countries across the globe. During this period there has been significant development in environmental and social risk management practices, partly as a result of the greater challenges impacting affected communities and the environment and partly due to the changing financial landscape, particularly the ongoing financial crisis and changing public perception of the role of financial institutions.
In 2010, the EP Association initiated a Strategic Review which produced a series of recommendations on key thematic areas, namely: scope, climate change, human rights, reporting and transparency, stakeholder engagement and governance. Parallel to this, the IFC initiated a review and update of their Sustainability Framework, and their Performance Standards, which underpin the EP, were updated and re-launched in January 2012. In this context it was deemed an appropriate time to reflect on the implementation experience of EP Association members, and that of our clients, and update the EP to ensure they remain a relevant and practical risk management tool and supportive of sustainable financing objectives.
The EP III Update process was launched in July 2011 and consists of three distinct phases. The result of the EP Update process will, if approved by members, be the third version of the Equator Principles – hence the term “EP III”.
PHASE I: Internal Consultation and Initial Drafting of EP III (July 2011 - August 2012)
Existing Working Groups and new Task Forces initiated discussions and detailed analysis for each topic area and shared proposals with the EP Association Steering Committee on how the EP framework might be updated to reflect changes to the IFC Performance Standards and current best practice. All members were invited to join the discussion groups to ensure full participation.
The Working Groups and Task Force proposals were discussed more widely with EP Association members at their Annual Meeting in October 2011 and the Working Groups and Task Forces were subsequently commissioned to provide final proposals and updated/new language for incorporation in to the EP.
The final proposals and updated/new language were examined and discussed at length by the EP Association Steering Committee and members and the first draft of EP III was approved for public release for the formal Stakeholder Consultation and Public Comment period.
PHASE II: Formal 60 day Stakeholder Consultation and Public Comment Period (August - October 2012)
The EP Association committed to carrying out a robust and consultative process. The formal 60 day stakeholder consultation and public comment period gave all interested parties and stakeholders (including EP Association members, other financial institutions, clients, industry bodies and associations, non-governmental organisations, consultants, law firms and regulatory bodies) an opportunity to review the EP III draft and provide comments. The EP Association is committed to openness, transparency and responsiveness and considered all stakeholder feedback.
The EP Association Working Groups worked with specific stakeholder groups (e.g. Industry/clients, NGOs) however the EP Association welcomed feedback and comments from any interested party on both process and substance.
PHASE III: Finalisation and Launch of EP III (October 2012 – Q1 of 2013)
The EP Association will review comments received from members and stakeholders during this period and will consult with members on amending the EP III draft.
The EP Association will not publish every comment received on the EP website however it will publish a summary (unattributed) of the key topics/issues raised during the Stakeholder Consultation and Public Comment period. The summary will include statements on how and why issues/comments have or have not been incorporated in to the EP III draft.
The EP Association will also agree a plan for the formal adoption and launch of EP III (including setting an official launch date and implementation transition period, training and communications) and will finalise all the relevant guidance notes during this period. It should be noted that the EP Association will carry out a final voting process with members, in line with the EP Association Governance Rules, to approve and re-adopt EP III.
Note that the timeline for the EP III Update process, described above, is tentative and may be extended by the EP Association as appropriate.