The Equator Principles Association Annual Meeting was held in Washington D.C. on 16-18 October with attendees from over 50 Equator Principles Financial Institutions (EPFIs).
15thAnniversary of the EPs
The Chair’s opening recognised that the Equator Principles (EPs) launched 15 years ago and has had a strong impact on the project financing market. The Chair also recognised that an update to the Principles was necessary to keep up with the changing sustainable finance landscape. The Association thanks the International Finance Corporation (IFC) for early support, positive communications around the anniversary, and most of all for hosting this milestone event.
The focus of the meeting this year was on evaluating proposed updates to the Equator Principles. The targeted update to the EPs – ‘EP4’ – considers four key themes: Social Impact and Human Rights, Climate Change, Designated Countries, and Scope of Applicability of the EPs. An additional proposal on biodiversity data sharing was also discussed.
Over the course of 2.5 days, each of the four key Working Groups presented their detailed proposals to the wider membership for feedback and debate. All of the sessions were very engaging with presentations, detailed discussions between members, question and answer and straw polling. Significant progress was made in narrowing down options for inclusion in the updated text. General agreements were made under each of the themes.
While the EP4 update will remain in the project-related space, work groups will be strategically formed to consider environmental and social risk decision-making in other financial products.
Over the next few weeks, the draft EP4 proposed text will be updated by the Working Groups, taking into account the feedback given at the meetings as well as some legal and feasibility checks.
The EP Association aims to be ready for Round 2 of external stakeholder consultation in Q1 2019 (per the originally communicated timetable) which will involve stakeholder consultation on the draft including a series of regional meetings or webinars. The intent would be to get feedback on the proposed changes from clients, affected communities and other stakeholders.
As inputs to the meeting, the Association commissioned a Strategic Review (conducted by ERM) and guidance to the Social Risk Working Group (provided by Shift). Summaries of each report and their recommendations will be released in the coming weeks.
Key themes for further inquiry
The meeting recognised that other important themes exist which were not addressed through the targeted EP4 update. Among the topics discussed were opportunities and the need to improve: transparency, disclosure and reporting; consistency in implementation; eligibility, accountability, and assurance; and grievance handling.The Steering Committee is currently considering additional efforts required around these themes and how to take them forward.
On Tuesday 16 October, several EPFIs attended an event organised by BankTrack and hosted at Friends of the Earth USA. Representatives from a number of civil society groups were present, including the Women’s Earth and Climate Action Network (WECAN), Honor The Earth, Rainforest Action Network, Market Forces, Sierra Club, and Greenpeace USA. The Association recognises the efforts of BankTrack in initiating this valuable event. With EPFIs, indigenous groups and NGOs in the room, a frank and honest discussion took place. The Association commits to future discussions of this nature with its stakeholders.
As always, any interested organisation or individual is invited to subscribe to news alerts, and to submit feedback via the online web form. All subscribers to the EP4 mailing list will receive notice when consultation on the draft EP4 text is announced.
For more information, to submit feedback and sign up to news alerts, please go to: https://equator-principles.com/ep4/.