The Equator Principles (EPs) is a risk management framework applied by financial institutions to define, assess, and manage environmental and social risks in development projects. It is intended to provide a minimum standard for due diligence and monitoring to support responsible risk decision-making. The EPs apply globally to all industry sectors and in particular, to five financial products:
- Project Finance Advisory Services,
- Project Finance,
- Project-Related Corporate Loans,
- Bridge Loans and,
- Project-Related Refinance, and/or Project-Related Acquisition Finance
There are currently 118 financial institutions across 37 countries adopting the EPs. Financial institutions employing the EPs commit to implementing the EPs in their internal environmental and social policies, procedures, and standards for financing projects and will not provide Project Finance or Project-Related Corporate Loans to projects where the client will not, or is unable to, comply with the EPs.
The benefit of the EPs is that they have become the financial industry standard for environmental and social risk management in projects. Financial institutions adopt the EPs to ensure that the projects they finance are developed in a socially responsible manner and reflect sound environmental management practices. By doing so, negative impacts on project-affected ecosystems and communities should be avoided where possible, and if unavoidable, should be reduced, mitigated, and/or compensated for appropriately.
Our Services
Benefits of Adopting the Equator Principles
- The adoption of and adherence to the EPs offers significant benefits to them, their borrowers, and local stakeholders through their borrowers’ engagement with locally affected communities. Adopters should be able to better assess, mitigate, document, and monitor the credit and reputation risk associated with financing development projects.
- Additionally, the collaboration and learning on broader policy application, interpretation, methodologies between adopters, and their stakeholders, helps knowledge transfer, learning, and best practice development.
INTERNAL BENEFITS FOR FINANCIAL INSTITUTIONS
- Incorporate EPs into your E&S risk management framework as a financial industry benchmark that is based on the policies and guidelines of the IFC
- Determine, assess, and manage E&S risks in project finance, project-related corporate loans, bridge loans and project-related refinance, and project-related acquisition finance
EXTERNAL BENEFITS FOR FINANCIAL INSTITUTIONS
- Promote your organisation’s responsible risk decision-making
- Advocate your corporate responsibility to promote social and environmental practices through its financing activities, methodologies between adopters, and their stakeholders, helps knowledge transfer, learning, and best practice development
- Offer opportunities to promote responsible environmental stewardship and socially responsible development
Contact us
FILL FORM AND OUR TEAM WILL CONTACT YOU