Tag Archives: EP4



Equator Principles Annual Meeting 2019 – Meeting Outcomes

November 28, 2019 EP Association News, EP In The Media

London, 28 November 2019

The Equator Principles Association Annual Meeting was held in Singapore on 18-20 November with attendees from over 60 Equator Principles Financial Institutions (EPFIs).

Launch of EP4

The fourth iteration of the Equator Principles (“EP4”) was launched at the opening of the Annual General Meetingand accompanied with a statement recognising the enormous support and contributions from a range of partners and stakeholders to the review.

The Steering Committee reported that there was a high turnout on the member vote (approx. 85), and 98.7% of participants voted in favour of the strengthened requirements. Taken together, this is considered an endorsement that, while resulting from a challenging process, the final EP4 succeeds in balancing a range of perspectives and circumstances. Ultimately the new Principles move global best practice for environmental & social risk in Projects a step forward.

Feedback to stakeholders

A document was released alongside EP4 that responds to the feedback received over the two-year review period. The document specifies how the many elements raised during the review of the Principles have been addressed in the final text of EP4. In other cases, the Association felt that certain elements would be more appropriately addressed via Governance Rules updates, training, or other efforts.

The Association has previously committed to more frequent but targeted reviews of the Principles. The Steering Committee will monitor for issues to cover in future reviews either of the Principles themselves or the associated guidance.

Chair handover and recognition

Standard Chartered was appointed the Chair of the EP Association Steering Committee on 21 November. This means that Standard Bank has now stepped down as the longest-serving Chair in the history of the Association (from 2015 to 2019). To mark this contribution, the Association awarded Nigel Beck of Standard Bank the Shawn Miller Award for EPA Leadership.  (Shawn was a previous Chair of the Assocition from from Citi who led the EPIII review).

The Association recognised Standard Chartered for the great leadership they have demonstrated by stepping up to this critical and voluntary role.

101 members

The Association welcomed DBS as the first member from South East Asia, and who brings the Association beyond 100 members. The intent of holding the meeting in this region was to facilitate awareness amongst financial institutions in Singapore but also neighbouring countries including Viet Nam, India, Indonesia, Thailand, China and others which represent a significant share of the Project Finance market.

Beyond EP4

The meeting affirmed that the Association’s priority areas include improving internal consistency and robustness of application, and strengthened EPFI accountability. The incoming Chair has made refreshing the Association’s strategy their top priority, recognising the increasingly dynamic landscape of sustainable finance.

The strategy will maintain the EPs as a multi-lateral risk management framework, rather than a policy-setting body. In line with the Op Ed released in August members will continue to set their own level of risk appetite, according to the commercial and other circumstances that they individually face.

Support for EP4 effective date

In the coming months EP4 working groups will be developing associated guidance to support relevant stakeholders in the implementation by the effective date of 1 July 2020. Further communications will be released over the coming months on this topic.

A strengthened Equator Principles, and new leadership for the Association

November 18, 2019 EP Association News, EP In The Media

Singapore, 18 November 2019

Today the updated version of the Equator Principles (EP), EP4, was adopted by the Equator Principles Association and represent the fourth iteration of the Principles since their inception in 2003.

The intent of the Principles remains to set the financial industry benchmark for determining, assessing and managing environmental and social risk in Project Financing.

Following the commitment by the Association (in October 2017) to review and update the EPs (the first revision outside of an IFC Performance Standard update cycle) the Association has undertaken a process involving extensive dialogue with a wide variety of stakeholders – including its own EPFIs,  EPFI clients, industry bodies, NGOs, civil society and other investors. In addition, the Association has engaged third parties to provide additional support and credible independence throughout the consultation phases, including ERM, Shift, Norton Rose Fulbright and BSR. Key contributions from the stakeholder consultation phases are available on the EP website.

All stakeholder feedback was reviewed in detail and debated amongst members and, where appropriate,  incorporated into the final EP4 language.  Amendments and new commitments have been made in relation to the following topics:  human rights, climate change, Indigenous Peoples and biodiversity. The scope of the EPs has also been extended to capture more Project-related transactions. Outstanding items will be further explored through guidance documentation or will be tabled for strategic EPA discussions going forwards, as indicated in a response document released today.

These new Principles will be formally launched with members at the EP Association Annual General Meeting in Singapore. The event will also celebrate the Association’s growth to more than 100 members.

These milestones come at the same time as the Association hands over leadership: Standard Chartered will be the new chair of the Equator Principles Association until 2021. The appointment will take effect on 21 November 2019.

The appointment means that Standard Bank, who have been in the Chair since June 2015, step down as the as the longest-serving Chair in Equator Principles history.

Nigel Beck, Head of Sustainable Finance at Standard Bank, and outgoing Chair of the EP Association Steering Committee said;

“For fifteen years, the EPs has been the leading framework insuring that the environmental and social impacts of large-scale project finance deals are minimised and managed responsibly. EP4 responds to a rapidly changing sustainable finance landscape and pushes our members further than before. As the Association moves into a new era, focused on refreshing our strategy and looking to the wider landscape, it’s opportune to hand over the reins. We wish Standard Chartered well and will provide our ongoing support to them in the endeavour of keeping the Equator Principles at the forefront of sustainable and responsible finance”.

Mercedes Sotoca, Head of Environmental and Social Risk Management. ING Bank, and one of the EP4 process coordinators with JP Morgan, said;

“EP4 is a welcome update of the Principles which comes after an intensive two-year review. It balances the interests of a diverse group of stakeholders who contributed to its development, and ultimately moves the Equator Principles a step forward. We look forward to working together with clients and fellow EPFIs to implement EP4 next year.”

Taking on the Chair role, Amit Puri, Global Head of Environmental and Social Risk Management, Standard Chartered, said; 

“We are honoured to be leading the Association at a time of acute focus on environmental and social issues. The Equator Principles are the gold standard for managing environmental and social risks, demonstrated by the fact they have been adopted by more than 100 global financial institutions. We thank Standard Bank for their exceptional leadership and look forward to their continued support and guidance.”

 

MEDIA CONTACTS:

For EP4 – Primary Contact: Jessica Smith

Email: secretariat@equator-principles.com
Telephone: +44 7882 286140

For Standard Chartered – Primary Contact: Bart Nash

E-mail:  bart.nash@sc.com

Phone:+44 207 885 7598

Mobile:  +44 7789 397 457

 

FURTHER INFO:

About EP4

The final EP4 document and a summary of stakeholder input received during the consultation period, plus EPA’s response to those recommendations, can be found at www.equator-principles.com/ep4.

For further information about the EPs contact the EP Secretariat by email at secretariat@equator-principles.com or visit https://www.equator-principles.com.

About Standard Chartered

We are a leading international banking group, with a presence in 60 of the world’s most dynamic markets, and serving clients in a further 85. Our purpose is to drive commerce and prosperity through our unique diversity, and our heritage and values are expressed in our brand promise, Here for good.

Standard Chartered PLC is listed on the London and Hong Kong Stock Exchanges as well as the Bombay and National Stock Exchanges in India.

For more stories and expert opinions please visit Insights at sc.com. Follow Standard Chartered on TwitterLinkedInInstagram and Facebook.

For further information go to www.standardchartered.com.

Review of the Equator Principles – Phase IV – Progress Update

June 7, 2019 EP Association News

The EPA continues to make progress towards the development of updated Equator Principles ‘EP4’ text. The legal review of the draft text, conducted by Norton Rose Fulbright, has now been completed.

The external stakeholder consultation phase has been delayed whilst we completed an enhanced internal consultation and approval processes, particularly on changes to Principle 5. It is anticipated that the public consultation process will now take place from early July once the draft text has been approved for public release by the Association members.

BSR has been engaged to conduct this external engagement on behalf of the EPA and will facilitate a series of webinars as well as face-to-face sessions for a sub-set of invited participants, where stakeholders can provide feedback on the proposed changes. The online form on the Equator Principles website is also available for any member of the public wishing to provide feedback.

The BSR-led public consultation will focus on the specific changes proposed in the targeted update, namely: Social impact and human rights, Climate change, Designated Countries and Applicable Standards, and Scope of applicability of the EPs. The full draft EP4 text will be made available in advance on the website so that all interested parties can provide informed comment. Feedback deemed beyond the scope of EP4 will be noted for consideration as part of subsequent EP revisions or complementary efforts such as Governance Rules changes.

Following the completion of the external consultation process, the Association will take stakeholders’ views and expectations into consideration to see where these could be incorporated into the EPs or other mechanisms, as appropriate. Following a final legal review and approval by the EPA, the final EP4 text is due to be launched in late 2019. A transition period will then follow to allow EPFIs time to implement EP4 within their institutions.

At any time, any interested stakeholder may submit feedback and sign up to be alerted when any EP review updates, including the draft text, are posted via: https://equator-principles.com/ep4/.

Review of the Equator Principles – Phase IV

March 1, 2019 EP Association News

01 March 2019

Progress continues towards the development of an updated Equator Principles ‘EP4’ text. We are now finalising Phase III ‘Agreement with the EP Association membership and initial drafting of the EP4 targeted update’ and transitioning into Phase IV ‘Second round of stakeholder consultation’.

This external stakeholder consultation phase will be somewhat delayed as compared to previously communicated timeframes whilst we complete internal consultation and approval processes, and undertake a legal review of the changes proposed. Norton Rose Fulbright have been contracted to complete a detailed review of the draft text to ensure that there are no legal issues with the draft text before it is released into the public domain.

It is anticipated that the consultation process will now begin in May once the draft text has been approved for public release by the Association members.

An independent third party, BSR, has now been engaged to conduct the external engagement and will facilitate a series of regional webinars and/or face to face sessions where stakeholders can provide specific feedback on the detail of the proposed changes. In addition, an online form on the Equator Principles website will again be made available for anyone wishing to provide feedback. The text will be made available on the website so that all interested parties can provide informed comment.

As has been previously outlined, this will be a targeted update primarily focusing on the following key areas: Social impact and human rights, Climate change, Designated Countries and Applicable Standards and Scope of applicability of the EPs.  The EPA has previously noted that this targeted update will focus primarily on the areas outlined above and may not address all potential areas for change. Feedback beyond the scope of EP4 will be noted for consideration as part of subsequent updates.

Following the completion of the external consultation process, the Association will take stakeholders’ views and expectations into consideration to see where these could be incorporated into the EPs or other mechanisms, as appropriate. Following a final legal review and approval by the EPA, the final EP4 text is due to be released in mid-late 2019.

At any time, any interested stakeholder may submit feedback and sign up to be alerted when any EP review updates, including the draft text, are posted via: https://equator-principles.com/ep4/.

Two commissioned reports supporting EP4 development

December 21, 2018 EP Association News
21 December 2018

The Equator Principles Association Annual Meeting was held in Washington D.C. on 16-18 October with focus on the internal development of the EP4 draft. A summary of outcomes was published online.

Commissioned reports

As inputs to the meeting, the Association commissioned two reports: a Strategic Review, conducted by ERM, and guidance to the Social Risk Working Group (SRWG), provided by Shift. Each supplier was commissioned through a competitive tender process with the supervision and agreement of the Steering Committee (SC).

More than 50 respondents provided feedback through interviews, surveys, or online questionnaire. The Equator Principles Association Steering Committee would like to sincerely thank all  those who participated in the process.

Summaries of each report and their recommendations are hereby shared publicly.

EPA Strategic Review Report: Executive Summary (ERM)

Enhancing the Alignment of the Equator Principles with the UN Guiding Principles on Business and Human Rights: A Public Summary of Shift’s Advice to the EPA

The Association continues to actively consider the findings and recommendations of both reports, and may specify which recommendations were taken up either in EP4 or through other EPA initiatives. Where relevant, we will identify which recommendations were not considered appropriate or de-prioritised.

Stakeholder feedback                                                                                          

Comments on these reports are welcome from any stakeholder. Any interested organisation or individual is invited to submit feedback via the online web form. All subscribers to the EP4 mailing list will receive notice when the draft EP4 text is released. For further information, or to subscribe to news alerts, please go to: https://equator-principles.com/ep4/.