About the Equator Principles

Large infrastructure and industrial Projects can have adverse impacts on people and on the environment. The Equator Principles (EPs) are intended to serve as a common baseline and risk management framework for financial institutions to identify, assess and manage environmental and social risks when financing Projects.

The Equator Principles apply globally, to all industry sectors and to five financial products:

1) Project Finance Advisory Services,

2) Project Finance,

3) Project-Related Corporate Loans,

4) Bridge Loans, and

5) Project-Related Refinance, and Project-Related Acquisition Finance.

Information on detailed thresholds and criteria for application can be found below under ‘Scope of the Equator Principles’.

Equator Principles Financial Institutions (EPFIs) implement the 10 Equator Principles through their internal environmental and social risk management policies, procedures and standards in order to align with the Equator Principles. EPFIs may (at their own discretion) choose to utilise the Equator Principles for additional financial products outside the scope of the Equator Principles.

The EPFIs, Equator Principles Steering Committee and the Office of the Equator Principles are committed to fully complying with antitrust / competition laws of relevant jurisdictions, including through adoption of an internal antitrust / compliance policy.

The Equator Principles are sector-agnostic, capable of global application, grounded in relevant international standards and laws where applicable, and are intended to provide a framework approach to Environmental & Social risk management to support each EPFI in its individual, independent assessment of Projects.

EPFIs use a collaborative approach (between each EPFI and its clients) to compliance with the Equator Principles and each EPFI should consider that any Project or Client can comply with the requirements of the Equator Principles with sufficient willingness and time to do so.

Each EPFI should apply the Equator Principles in accordance with all relevant legal obligations, including all applicable antitrust / competition laws, and ensure that:

1. each individual EPFI continues to determine its conduct independently of other EPFIs (including as regards commercial conduct on the market, selection of terms and conditions, application of the Equator Principles to any in-scope financial product, and integration of the Equator Principles into internal policies and procedures),
2. no engagement between EPFIs as regards the Equator Principles should require disclosure or discussion of competitively sensitive information, and
3. no collective boycott of any Client, Sector or Project is proposed or contemplated.

The Equator Principles make a distinction between Designated and Non-Designated Countries in the application of the Equator Principles.

Designated Countries are those countries deemed to have robust environmental and social governance, legislation systems and institutional capacity designed to protect their people and the natural environment. Equator Principles Financial Institutions (EPFIs) make no independent assessment of each country’s performance in these areas. As a proxy for such an assessment, the EPFIs require that a country must be both a member of the Organisation for Economic Co-operation and Development (OECD) and appear on the World Bank High Income Country list to qualify as a Designated Country. These data sets are reviewed quarterly by the Office of the Equator Principles to ensure that any change in status is reflected in the Designated Countries list.

The following countries are Designated Countries (as at 1 March 2024):

The Equator Principles have become the financial industry gold standard for environmental and social risk management in projects. Financial institutions become Equator Principles Financial Institutions (EPFIs) to ensure that the projects they choose to finance are developed in a socially responsible manner and reflect sound environmental management practices. By doing so, negative impacts on project-affected ecosystems, workers and communities should be avoided where possible. If unavoidable, negative impacts should be reduced, mitigated and/or compensated for appropriately.

Adherence to the Equator Principles offers significant benefits to EPFIs, their borrowers and local stakeholders through their borrowers’ committed engagement with locally affected communities. EPFIs should be able to better assess, mitigate, document and monitor the environmental and social risk associated with financing projects.

Additionally, the collaboration and learning on broader policy application, interpretation and methodologies between EPFIs, and with their stakeholders, helps knowledge transfer, capacity building, learning and best practice development. The EPFIs role as project-related advisers and financiers affords them opportunities to explain, promote and champion responsible environmental stewardship and socially responsible development. This positive influence is growing, which benefits EPFIs, people and the planet.