Becoming a Signatory
Guidance and information on the application process
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Becoming a Signatory to the EPs
Becoming a Signatory to the Equator Principles (EPs) is open to any financial institution that meets the relevant signatory requirements and agrees to meet the ongoing requirements, as set out in the Signatory Rules.
New Signatories to the EPs are called Probationary Signatories. Once they meet certain requirements, they will become Full Signatories. Probationary Signatories and Full Signatories are Active in providing In-scope Financial Products and are referred to as ‘Equator Principles Financial Institutions (EPFIs)’. A third category of Signatory is Affiliate Signatories, which is for Inactive Signatories.
Financial institutions must apply to become a Signatory to the EPs – the process is outlined below.
Any Financial Institution seeking to become a Signatory to the EPs must do so at the Group level, whereby each Group is considered as a single EPFI under the Signatory Rules and listed as a single entity on the list of Signatories. Parents or subsidiaries that are branded/marketed as distinct entities, and are strategically and operationally autonomous, will be able to become a Signatory as an individual entity. Becoming a Signatory at the highest possible level enables a broad and consistent commitment to the Equator Principles across an institution’s relevant business functions and operating subsidiaries.
The Application Process
The process for becoming a Probationary Signatory to the EPs is outlined below:
Before embarking on the application process to become a Probationary Signatory the prospective new EPFI (the Applicant) should read and understand:
- the Equator Principles (EPs) and
- the ‘Frequently Asked Questions’ (see below).
Contact the Office of the Equator Principles (at email@example.com), who will ask some initial questions to determine the Applicant’s suitability to become a Probationary Signatory and answer any queries the Applicant may have. Application Materials will then be provided to the prospective EPFI for completion.
On submission of the Application Materials, the Office of the EPs will undertake an initial review of the materials and, where necessary, request clarification or modifications.
The Application Materials are then reviewed and approved by the EP Steering Committee. The prospective EPFI should note that:
- applications are reviewed at the end of each quarter so the decision cannot always be made immediately;
- there can be a several-months long process of review to ensure the eligibility criteria are met, including on the appropriate Group level for each Applicant.
Following final approval, a Signing Date will then be agreed between the Office of the EPs and the new EPFI.
Frequently Asked Questions
Who can become a Signatory to the Equator Principles (EPs)?
The appropriate category of EP Signatory is determined by whether the financial institution is “Active in Project Finance, Project Finance Advisory Services, Project-Related Corporate Loans, Bridge Loans, Project-Related Refinance and/or Project-related Acquisition Finance”.
Evidence, such as from international league tables, to demonstrate that the prospective EPFI undertakes Projects that would deem it ‘Active’ may be required as part of the process.
Financial Institutions who are Inactive in the provision of In-Scope Financial Products can apply to become an Affiliate Signatory.
What does becoming an Equator Principles Financial Institution (EPFI) involve?
Probationary and Full Signatories to the EPs (known as Equator Principles Financial Institutions or EPFIs) are governed by a Steering Committee of elected volunteers whose work is largely undertaken by a number of voluntary EPFI-led Working Groups. All Signatories benefit from the work of the Steering Committee and the Working Groups, and as such, they are expected to play an active role in participating, and supporting the work of these groups. Tasks might include engaging in Working Group calls, contributing to and reviewing guidance documents, and inputting into reviews by third party consultants undertaken on behalf of the Signatories to the EPs.
Signatories to the EPs have access to a wide collaborative network of peers to share knowledge and contribute towards best practice development. Signatories are strongly encouraged to participate in the Annual Meeting, which offers a great opportunity to network with other EPFIs, as well as to learn more about the Work Plan and implementing the Equator Principles.
My financial institution is interested in becoming a Signatory to the EPs, what is the first step?
As a first step we encourage prospective Signatories to thoroughly review the EP website to ensure that they understand the Equator Principles and the different categories of Signatories to the EPs.
We strongly encourage any prospective Signatories to read in detail:
- The most recent version of the Equator Principles, before deciding if they wish to proceed with a query.
- The Resources page, which contains key EP documents including important information on EP implementation.
- The Application Process section (above), which contains key details on how to become a Signatory.
Once all these resources have been reviewed and a prospective Signatory is keen to continue or has further questions, they should then contact the Office of the EPs at firstname.lastname@example.org about application details and/or any Signatory-related questions.
Some financial institutions may choose to consult with an existing EP Financial Institution in the same region for information and experience about becoming a Signatory.
Note that all queries relating to becoming a Signatory to the EPs remain confidential until the Signing Date.
What are the factors considered when reviewing an application?
Becoming a Probationary Signatory to the Equator Principles is open to financial institutions who undertake transactions within the scope of the Equator Principles (i.e. the financial institution has a level of activity in Project Finance as per the Equator Principles definition). Evidence of this via league tables or project examples can be helpful. For more information see Scope of the EPs.
Financial institutions seeking to become a Signatory must do so at the Group level. A Group is defined as all entities and subsidiaries within a holding company or group of companies that operate under similar branding.
How long does the process to become a Signatory to the EPs take?
A key factor is the readiness of the prospective Signatory. However, timing can vary due to several factors, including for example:
1) whether the prospective Signatory provides the required information and documentation in a timely manner;
2) whether additional information is required;
3) application materials are reviewed by Office of the EPs and the Steering Committee four times a year (quarterly), and
4) the number of applications in the pipeline (they are reviewed on a first-come first-served basis).
If there is a particular date by which an institution wishes to become a Signatory, then they will need to notify the Office of the EPs early in the process and also ensure that all of the required documentation, and supplementary material, is available. The Office of the EPs cannot guarantee that a specific timeframe can be met.
Are we required to use a third party (e.g. a consultant or legal firm) to assist with the application process?
No. The application process is very straightforward and the Office of the EPs can assist with any queries that you may have. You might also wish to speak directly with an existing EP Financial Institution (EPFI) in your region.
Does my institution need to have specific policies and procedures in place to become a Signatory to the EPs?
Becoming a Signatory to the Equator Principles (EPs) is voluntary but once a financial institution has become an Equator Principles Financial Institution (EPFI) it must take appropriate steps to implement the Equator Principles. Each EPFI shall introduce and implement its own internal environmental and social risk management policies, procedures, and standards.
There is a range of key documents and resources about implementing the Equator Principles on the Resources page.
Can my institution become a Signatory to the EPs if we do not provide In-Scope Financial Products?
Yes. Any Financial Institution that is Inactive in the provision of In-Scope Financial Products may apply to become an Affiliate Signatory, to access the benefits of Affiliate Signatory status. Benefits include, for example, access to a network of E&S practitioners and EP Guidance materials, the ability to participate in Working Groups, and to attend some EPFI meetings. The process for becoming an Affiliate Signatory is very similar to the application process described above for becoming a Probationary Signatory.
Affiliate Signatory status is also an option for existing EPFIs (Probationary or Full Signatories) that are no longer Active but wish to remain Signatories.