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.”
For EP4 – Primary Contact: Jessica Smith
Telephone: +44 7882 286140
For Standard Chartered – Primary Contact: Bart Nash
Phone:+44 207 885 7598
Mobile: +44 7789 397 457
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 email@example.com or visit https://www.equator-principles.com.
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