NEW - Publication of the Equator Principles (June 2013) Implementation Note

21 July 2014

The Equator Principles Association is pleased to share a new document Equator Principles (June 2013) Implementation Note’ with external stakeholders and other interested parties. The document, written by EPFIs, contains selected information and examples to support the understanding of the requirements in, and implementation of, the Equator Principles.

Ryosuke Ueda, Head of Sustainable Development Department, Mizuho Bank and Chair of the Equator Principles Association Steering Committee commented,

“With the introduction of new requirements and the expansion of scope to Project-Related Corporate Loans and Bridge Loans, the Equator Principles Association wanted to provide further support to both Equator Principles Financial Institutions (EPFIs) and external stakeholders on understanding the Equator Principles. Whilst every financing is unique and the document cannot cover every scenario, it is hoped that the publication of the document will help clarify, and provide insight on, some of the key aspects of the Equator Principles. The Equator Principles Association is committed to building capacity internally and externally and as such the document will continue to be developed over time to reflect the experience of EPFIs, clients and stakeholders, and in response to other changes affecting implementation (e.g. regulatory developments, technological advances).”

The document comprises a series of modules containing information to support the implementation of the requirements contained in the Equator Principles on scope, climate change (Principle 2 and Annex A of the Equator Principles) and reporting (Principle 5, 10 and Annex B of the Equator Principles). The document does not intend to establish new principles or requirements, and as every project is different (i.e. in nature, scale, risks and impacts) and each EPFI makes implementation decisions based on its institution’s policy, practice and procedures, its content may not be relevant/applicable in every case. If an EPFI or stakeholder has any doubt about an Equator Principles requirement, it should always refer to relevant principle in the Equator Principles (dated June 2013).

It should be noted that the information and examples are provided without guarantee of any kind, either express or implied, including, without limitation, guarantees as to fitness for a specific purpose, non-infringement, accuracy or completeness. The Equator Principles Association shall not be liable under any circumstances for how or for what purpose users apply the information, and users maintain sole responsibility and risk for its use. No rights can be derived from this publication.

The Equator Principles Association welcomes feedback and input on the document, therefore please send your comments or questions to the Equator Principles Association Secretariat at JLIB_HTML_CLOAKING

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Further useful Guidance Notes can be found on the Best Practice and Resources page

Eksportkreditt Norge AS Adopts the Equator Principles

Oslo, 27 June 2014

Export Credit Norway joins the international initiative to safeguard environmental and social conditions and has decided to adopt the Equator Principles.

The company follows many of its business partners in adopting the principles, formed to ensure responsibility and sustainability in financing of international project.

"Many of the international banks we work closely with have adopted the Equator Principles, and  the initiative has contributed in raising awareness on social and environmental issues. We therefore see it as a natural step for us to join the initiative," CEO of Export Credit Norway Jarle Roth says.

Read more...

Commonwealth Bank of Australia Adopts the Equator Principles

Sydney, 26 May 2014

On 26 May 2014 Commonwealth Bank became a signatory to the Equator Principles. The Equator Principles are a voluntary set of guidelines to assess and manage environmental and social risks in project finance.

The Equator Principles have evolved over time. The third iteration, Equator Principles III, reflects the latest developments in environmental and social risk management practices and associated governance around compliance.

By adopting the Equator Principles III, we further build on our commitment to responsible lending and formalise reporting of our environmental and social risk practices.

For further information go to the Commonwealth Bank website.

Human Rights: The Next Frontier

15 April 2014 - MIT Sloan Management Review - Olivier Jaeggi

The Guiding Principles have already influenced many standards and guidelines relevant to businesses. The most important of these include the OECD Guidelines briefly discussed above, the Renewed EU Strategy 2011-14 for Corporate Social Responsibility, including the related action plans of the EU member states, and — primarily relevant in the context of public or private infrastructure construction projects — the latest release of the Equator Principles. Read More.

Mizuho will Assume the Chair of the Equator Principles Association

First Asian Bank to Hold the Chair Position

27 March 2014

Mizuho Bank, Ltd. (MHBK; Yasuhiro Sato, President and CEO) will take on the role of Chair of the Equator Principles Association (EPA) from 1st May. This is the first time an Asian bank has been appointed as the EPA Chair. The EPA is an association of 79 global financial institutions that adopt the Equator Principles (EPs), supporting sound and responsible project development with environmental and social consideration.

The EPs are a risk management framework adopted by EP financial institutions (EPFIs) for determining, assessing and managing environmental and social risk in large-scale infrastructure or industrial projects when providing finance. These are a set of voluntary standards under which EPFIs request certain actions from the borrower to ensure the project is executed in an environmentally and socially sound manner.

First launched by US and European financial institutions in June 2003, the EPs are now a global standard for conducting large-scale development projects, adopted by 79 of the major banks around the world. In October 2003, Mizuho Bank (formerly Mizuho Corporate Bank) became the first Asian bank to adopt the EPs, in order to fulfill its responsibilities as an international bank with global operational presence.

In recent years, large natural resource development and infrastructure projects have been embarked upon in emerging countries including in Asia. On the other hand, the institutional framework to manage environmental and social aspects is still in the process of developing in these regions. MHBK has been leading the EPA’s EP Outreach Working Group in Asia since August 2010, concentrating on communicating with the local governments and banks to expand and deepen their understanding of the EPs.

Helping the institutions build E&S risk management capacity through seminars, hosting of trainees, etc., MHBK’s efforts have been instrumental in having initial member banks from China and India adopt the EPs.

MHBK is firmly committed to play a leadership role among EPFIs as the first Asian Chair to pursue the sustainable economic development of emerging markets in Asia and all around the world by taking advantage of its long experience in executing EP-based project finance.

For further information go to: http://www.mizuhobank.com/index.html

UPDATED - Guidance for EPFIs on Incorporating Environmental and Social Considerations into Loan Documentation

12 March 2014

Following the launch of the Equator Principles (EP) III in June 2013 and end of the EP III transition period, the EP Association has updated its guidance document for Equator Principles Financial Institutions (EPFIs) on incorporating environmental and social considerations in to loan documentation.

The Guidance for EPFIs on Incorporating Environmental and Social Considerations into Loan Documentation, originally published in 2009, has been revised to reflect the new language and extended scope of EP III, and now includes specific clauses on Independent Environmental and Social Consultant Reviews and reporting requirements for borrowers.

Note the guidance document is for use by EPFIs to assist them in incorporating environmental and social considerations into loan documentation (as appropriate) and is not a required legal framework.

Further resources can be found on the Best Practice and Resources page.

NEW - Guidance for Consultants on the Contents of a Report for an Independent Environmental & Social Due Diligence Review

12 March 2014

The Equator Principles (EP) Association is pleased to share the new guidance note, “Guidance for Consultants on the Contents of a Report for an Independent Environmental & Social Due Diligence Review”  for use by consultants to support their engagement with EPFIs when undertaking an Independent Environmental and Social Due Diligence Review (as described in Principle 7 of the EP).

This guidance document  can also be used by EPFIs to assess whether an Independent Review delivered by a Consultant is appropriate. It should be noted that EPFIs may have additional requirements for an Independent Review which are specific to a particular Project and are not covered in this guidance document

Further resources can be found on the Best Practice and Resources page.

Impact investing grows as asset managers recognise value

12 February 2014 - Guardian Sustainable Business, Justina Alders-Sheya

Stakeholders increasingly expect to see evidence that their money is being invested responsibly - impact investing can provide that assurance. The Equator Principles are often used as a reporting standard to ensure investments are adding real value. With a growing focus on the environment, our social footprint and the principles of ethical corporate governance, the investment process, across all of these asset classes, is evolving. The term 'impact investing' is increasingly being used to describe when asset managers proactively integrate one or more of these three elements into their investment strategy. It represents a move towards a new way of investing, with social conscience at the forefront of every deal. Read More.

The Equator Principles: Ten Teenage Years of Implementation and a Search for Outcome

30 January 2014 - CIGI Series, Olaf Weber and Emmanuel Acheta

This paper correlates these 10 years of existence to the adolescent stage of the EPs, still seeking to establish relevance. Environmental and social assessment of projects is increasing in global adoption and scope and the EPs strive to redefine these assessment practices. Critics reason, however, that without implementation efforts and enforcement, the EPs are merely window dressing and will not contribute to any change to sustainable development. The authors point out gaps in how EPFIs address the implementation of guidelines in project finance decision making, how projects implement environmental and social assessment processes in practice and whether the implementation will have a positive effect on project sustainability. The paper concludes that these gaps need further research and analysis to better understand the role of the EPs in sustainable development. Read More.

Launch of the Cross Sector Biodiversity Initiative Timeline Tool

27 January 2014

The Cross Sector Biodiversity Initiative (CSBI) has launched a Timeline Tool designed to assist project planning in the extractives industries to better align project development, biodiversity impact management, and financial timelines and milestones.

The tool:

  • Provides a road-map that helps to identify critical milestones and inter-dependencies between project development and financing timelines
  • Identifies actions required to apply the mitigation hierarchy to effectively address potential impacts as early as possible in the project life-cycle
  • Raises awareness and highlights sensitivities and operational challenges associated with biodiversity impact mitigation
  • Can be used as an internal capacity building resource or communications tool as it supports the work of a variety of functions in project planning and execution.

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CSBI Timeline Tool

About the CSBI

The Cross Sector Biodiversity Initiative (CSBI) is a partnership between IPIECA, the International Council on Mining and Metals (ICMM), and the Equator Principles Association. The initiative aims to develop and share good practices for the effective application of the new International Finance Corporation (IFC) Performance Standard 6 on Biodiversity Conservation and the Sustainable Management of Living Natural Resources.  The aim of the CSBI is to bring together industry in order to share experiences as part of a culture of learning and continuous improvement.