About the Equator Principles Strategic Review - 2010/2011
On 19 October 2010 the Equator Principles (EP) Association launched a Strategic Review to produce a multi-year strategic vision to ensure that the EPs continued to be viewed as the “gold standard” in environmental and social risk management for Project Finance within the financial sector.
When the Strategic Review was launched there had been significant growth in the number of EPs adopters since its inception (from ten to over 65 financial institutions from across the globe) making the EPs a leading and respected voluntary standard for the financial sector. The EP Association recognised that alongside this growth the social and environmental challenges, that concern and impact communities and the environment, had also increased.
The main aims of the Strategic Review were to assess progress to date, identify future challenges and opportunities, evaluate how best to address the issues effectively, and to take all stakeholder perspectives into account. The Strategic Review helped the EP Association:
- take stock of the current state of the EPs and develop a better understanding of the challenges and successes to-date,
- identify perceived areas of strength and weakness in the current EP framework through engagement with members and other stakeholders including clients and industry, civil society, and financial sector peers,
- identify recommended action points that will lead to the successful implementation of the vision/plan, and
- prepare for a likely update of the EPs in 2011 following the conclusion of the International Finance Corporation (IFC) Performance Standards Review and Update process (launched in Sept 2009).
Following a competitive bidding process, the EP Association Steering Committee selected leading global environmental consultancy Environmental Resources Management (ERM), in partnership with independent sustainable banking consultant Suellen Lazarus, to manage the review on behalf of the EP Association, and synthesize feedback for consideration.
The EP Association elicited targeted feedback from members, financial sector peers, clients and industry bodies, and civil society and received additional feedback from interested parties.
The EP Association also held a Strategic Review meeting in Beijing (hosted by Citi China) on 1 and 2 December giving members the opportunity to examine the vision for the Equator Principles going forward. It was attended by 31 participants (including Steering Committee members and members representing each region). The Strategic Review consultants presented views gathered through surveys and direct conversations with industry, civil society, and other key stakeholders such as the IFC and other agencies. Numerous issues were debated including the 'beyond project finance' topic, transparency and disclosure, consistency in EP application, and other governance topics. The meeting also benefited of guest-speakers, including a senior representative of China's Ministry of Environmental Protection.
On the 24 May 2011, the EP Association announced the conclusion of the Strategic Review process with the public release of the Executive Summary and Appendix of the Strategic Review consultant's report and associated EP Association Summary Response.
The Summary Response detailed some of the short, medium and long-term actions that the EP Association would prioritise during the EP III Update process. The Strategic Review was the first step in a longer term process to determine the future of the EPs and the EP III Update process has allowed the EP Association to fully debate and evaluate the recommendations that came out of the Strategic Review.