Public Environmental Policy Statement Sustainability Commitment

New York - 25 April 2005

JPMorgan Chase recognizes that balancing non-financial factors such as environmental and social issues with financial priorities is an essential part of good corporate citizenship, in addition to being fundamental to risk management and the protection of investors. We have a direct impact on the environment through our daily consumption of energy and paper resources. We also potentially have an indirect effect on the environment through the provision of financial services to projects in environmentally sensitive areas.

Protecting the natural systems upon which all life depends while lifting people out of poverty and advancing economic development are among the greatest challenges confronting humanity. These three pillars of sustainable development are central to the UN Millennium Development Goals adopted in 2000. We recognize that the policies and practices we adopt today will shape not only our lives but also those of future generations. We therefore have an pportunity to make a positive contribution to environmental and social concerns by enacting policies designed so that our business operations do not degrade the environment or cause social harm. Such policies not only indicate positive environmental stewardship, but also present business opportunities such as innovative financial products and investments in sustainable forestry and renewable energy. This will help us better manage our risks, attract and retain critical talent, develop expertise, and provide clients with solutions to evolving exposures.

To demonstrate our commitment, JPMorgan Chase is adopting a comprehensive environmental policy. The policy will be implemented with an Environmental Management System that includes planning, training, implementation, measurement, reporting and review, and will apply to new business and existing business that comes up for renewal or extension after September 1, 2005. Specifically, we will integrate environmental and social awareness into the credit analysis and financing decision process, and incorporate it, where appropriate, as part of our due diligence review. We will train relevant employees to take responsibility for and implement these policies. Finally, we will publish an annual sustainability report using the

Global Reporting Initiative1 framework.

Our Environmental Commitment

The policy and commitments are structured as follows:

  • Section A: Environmental Risk Management Policy
  • Section B: Climate Change Policy, Products and Research


  • Section C: Forestry and Biodiversity Policy and Commitments
  • Section D: Indigenous Communities
  • Section E: Internal Resource Management
  • Section F: Implementation and Reporting


Equator Principles and Beyond

JPMorgan Chase is adopting the Equator Principles for business in our Investment Bank and Commercial Bank. Based on the policies of the World Bank and its private sector arm, the International Finance Corporation, the Equator Principles serve as a framework for determining, assessing, and managing environmental and social risk in project financing. These principles apply to projects with a total capital cost of $50 million or more. The specific procedures including categorization of projects and application of safeguards can be viewed at

In addition, JPMorgan Chase will apply the Equator Principles to all loans, debt and equity underwriting, financial advisories and project-linked derivative transactions where the use of proceeds is designated for potentially damaging projects. For transactions in the mining, forestry, oil and gas industries, the threshold for applying the Principles will be $10 million.

Private Equity Investments

Our private equity divisions conduct an environmental review as part of their investment decision process for direct investments in companies in environmentally sensitive industries. The review process analyzes our prospective portfolio companies' compliance with applicable environmental laws, regulations and international norms. The environmental review process is an integral part of our private equity area's thorough due diligence review of companies and their management.

Once an investment is made, through their membership on a portfolio company's board of directors, our private equity divisions monitor their portfolio company's operations with respect to environmental compliance issues .


The scientific evidence provided by the Intergovernmental Panel on Climate Change (IPCC), a body created by the United Nations and the World Meteorological Organization, concludes that climate change is linked largely to the emissions of greenhouse gases caused by human activity, from the burning of fossil fuels, and deforestation. While there remains uncertainty regarding the severity of impacts, we believe that it is appropriate to adopt a precautionary approach to climate protection by working to reduce greenhouse gas emissions today.

JPMorgan Chase will assume a leadership role in the financial services industry by helping to reduce greenhouse gas emissions in our value chain and internally, as described in Section E. We believe we cannot accomplish significant reductions alone; we need the support of our clients, as well as public policy that establishes certainty for investors and allows significant investments in greenhouse gas mitigation. We will therefore work with our industry, clients and policy makers to establish a policy framework for direct and indirect greenhouse gas emissions reductions.

The following policy is applicable to our Investment Bank and Commercial Bank.

I. Risk Management Policy

Carbon Mitigation

JPMorgan Chase will encourage clients that are large greenhouse gas emitters to develop carbon mitigation plans. The plans will include measurement and disclosure of greenhouse gas emissions and descriptions of plans to reduce or offset emissions. We will add carbon disclosure and mitigation to our client review process beginning by year end 2005.

In project transactions in the power sector, we will quantify the financial cost of greenhouse gas emissions and integrate them into financial analysis of the transaction. Internalizing the cost of carbon in this way may alter investment choices, and we will encourage clients to evaluate alternative energy technologies. We will develop these new models by end of year 2005.

II. Supporting Commitments

a. Advancing the Public Discourse

JP Morgan Chase will arrange meetings with other financial institutions to advocate for reductions of greenhouse gas emissions. We will work with these peers, the electric utility industry, climate policy experts in NGOs and academia, states, and the US government. This dialogue will focus on specific projects to alter the emission trajectory of the US economy. The projects will include:

  • A policy dialogue to advocate that the US government adopt a market-based national policy on greenhouse gas emissions, which includes all sources of emissions and is fair. Options include either a cap-and-trade or tax policy to reduce greenhouse gas emissions at the lowest possible cost. This process will commence by end of year 2005.
  • Seek to form a coalition to explore financing the greenhouse gas mitigation of coal-fired generating capacity. We expect this coalition to commence by early 2006.

b. Products and Research to Address Climate Change

  • Carbon Reduction

We will work with clients to develop favorable financing solutions to fund development of relatively lower carbon emitting technology solutions and investments in greenhouse gas reduction. These solutions will be created by mid 2006.

  • Research

JPMorgan Chase will use its leadership position in corporate research to explore the business risks associated with climate change and opportunities for greenhouse gas reductions. Our corporate research will explore the potential financial liabilities of carbon emissions to large direct emitters. We will reexamine valuations in the oil, gas, power and transport sectors in light of the operating constraints posed by limits on carbon emissions, and the emergence of alternative clean technology. Conclusions of our research should encourage disclosure, mitigation and new business development of affected companies. In specific sectors, we will also explore the possibility of having our JPM analysts incorporate climate risk into their regular research. We will do this by end of year 2005.

We will research the financial implications of higher costs of carbon emissions to the electric power industry. Particularly for coal-fired electricity generation, investment choices could be materially influenced by carbon-constrained future scenarios.

  • Carbon Reporting

JPMorgan Chase will annually report the aggregate greenhouse gas emissions from our power sector projects beginning in 2006.

  • Renewable Energy Investment

As part of its energy practice, our private equity group has invested in renewable energy generation projects and will continue to consider other investments in profitable renewable energy generation and technology.Energy Efficient Mortgage

In our mortgage loans products, we will accommodate higher debt to income ratios for homes that are considered energy efficient.

  • “Green” Housing

We will continue to seek investments in low-income “green” housing that conserves energy and natural resources, promotes health, and provides easy access to jobs, schools, and services.


Forests are home to more than half of all terrestrial species and support the livelihoods of millions of people. They are sources of food, medicine, lumber, and aesthetic benefits. They sequester carbon, clean water and cycle nutrients. In spite of their critical importance, forests are under threat; half of the world's forests are gone and well over 30 million acres more are lost each year. In addition, the decline in our high ecological value forests results in the loss of critical biodiversity as natural habitats are destroyed. To address this decline, we will apply the following policy to our Investment Bank and Commercial Bank.

Risk Management Policy

a. No Go Zones

JPMorgan Chase believes that there are certain places on earth with cultural and natural values so great that we as a global citizen must take extra precautions to protect them. JPMorgan Chase prefers to only finance preservation and light, nonextractive use of forest resources for projects in forests whose high conservation values are endangered.2 In addition, we will not finance extractive projects or commercial logging in World Heritage sites.

Further, as part of our implementation of the Equator Principles:

  • JPMorgan Chase will not finance commercial logging operations or the purchase of logging equipment for use in primary tropical moist forests.
  • JPMorgan Chase will finance plantations only on nonforested areas (including previously planted areas) or on heavily degraded forestland.
  • JPMorgan Chase will not finance projects that contravene any relevant international environmental agreement which has been enacted into the law of, or otherwise has the force of law in, the country in which the project is located.

b. Global Endangered Zones

JPMorgan Chase will not finance any project or provide loans where the use of proceeds is designated within critical natural habitats,5 unless the sponsor or borrower, as appropriate, has demonstrated to JPMorgan Chase’s satisfaction the following:

  • They have considered economic and technically feasible alternatives to avoid such areas and have addressed these issues in a publicly available

Environmental Assessment;

  • The project will not significantly convert6 or degrade7 the critical natural habitat;
  • Project management has adequate capacity and willingness to ensure biodiversity protection and respect for the rights of indigenous communities whose livelihoods or cultural integrity could be adversely impacted;
  • Indigenous peoples and local communities8 affected by the project, whether directly or by induced impact, have the opportunity and if needed, culturally appropriate representation, and have access to relevant information, to engage in informed participation;
  • The governmental authorities at the local, regional or national level have provided mechanisms for the affected communities to be represented or consulted, and  international, national and local laws have been upheld; and
  • An Environmental Assessment has been prepared that takes into account such consultations and is publicly available.

c. Sustainable Forest Management

  • JPMorgan Chase will adopt specific policies to protect the highest conservation values in forests. The process of protecting high conservation values includes scientific assessment of species, cultural assessment, and conservation plans to protect species or cultural sites that are unique, rare, threatened or endangered.

The Forest Stewardship Council (FSC)10 is one of the most robust high conservation value assessment processes. We prefer FSC certification when we finance forestry projects that impact high conservation value forests, unless a comparable asses sment process underpins a conservation plan. For operations that are not already certified, we will introduce them to credible experts who can help establish a rigorous, time-bound, step-wise approach to achieve certification.

  • We will review and understand the merits of the different internationally accepted forestry certification standards to better understand best practices.

d. Illegal Logging

  • We will not finance companies or projects that collude with or are knowingly engaged in illegal logging.11 Clients that process, purchase, or trade wood products from high risk countries12 will have certifiable systems in place to ensure that the wood they process or trade comes from legal sources. Due diligence will include company representations as to its practices, monitoring and, by 2007, chain of custody certification (e.g. FSC controlled wood standard) for illegal logging.
  • We will not finance companies or projects that do not have an explicit policy against the uncontrolled and/or illegal use of fire in their forestry, plantation or extractive operations.

e. Land Conservation

If JPMorgan Chase acquires significant amounts of environmentally sensitive land as a result of a default or debt work-out situation, we will work with conservation groups and local stakeholders to consider conservation alternatives, including donation, environmental management plans or protective easements.


JPMorgan Chase recognizes that the identities and cultures of indigenous peoples are inextricably linked to the lands on which they live and the natural resources on which they depend. We recognize the rights of these communities regarding issues affecting their lands and territories, traditionally owned or otherwise occupied and used.

JPMorgan Chase prefers to only finance projects in indigenous areas where free, prior informed consultation results in support of the project by the affected indigenous peoples. Such projects will include measures to: (a) avoid potentially significant adverse effects on the indigenous peoples’ communities; or (b) when avoidance fails, minimize, mitigate, and compensate for such affects. JPMorgan Chase’s due diligence will include an assessment of the impact on indigenous peoples, as follows:

For such projects, which impact indigenous people in sensitive areas, whether directly or by induced impact, the project sponsor or borrower, as appropriate, will have demonstrated the following:

  • They have given indigenous people the opportunity and, if needed, culturally appropriate representation to engage in informed participation and collective decision-making;
  • Provided information on the ways in which the project may have a potentially adverse impact on them in a culturally appropriate manner at each stage of project preparation, implementation and operation;
  • Given adequate time to study the relevant information; and
  • Provided access to a grievance mechanism.

In addition, the project sponsor or borrower, as appropriate, will have demonstrated the following:

  • Consultation approaches that rely on existing customary institutions, the role of community elders and leaders, and the established governance structure for tribal and indigenous communities;
  • Governmental authorities at the local, regional or national level have provided mechanisms for the affected communities to be represented or consulted, and international and local laws have been upheld; and
  • Major indigenous land claims are appropriately addressed.


a. Internal greenhouse gas reductions

JPMorgan Chase will assess its greenhouse gas footprint based on our 2005 US baseline, and set a goal of a 5-7% reduction by 2012. We will enhance existing energy management programs to include best practices cross various facilities.

b. Paper Procurement

JPMorgan Chase is working to maximize the use of environmentally friendly paper, such as post-consumer waste recycled content paper. Our first focus is on copier and office printer paper. We have recently begun to utilize duplex printing on copiers and office printers to help reduce the volume of paper consumed. We are investigating the use of environmentally friendly paper, including recycled paper, used in other types of printing. We will also examine using paper suppliers that source their products from independent third-party certified, well managed forests.


a. Implementation and Capacity Building JPMorgan Chase will take necessary steps to train staff and provide tools and resources, so that environmental objectives are met and that procedures, policies and standards are implemented.

b. Corporate Sustainability Reporting and Review

JPMorgan Chase will publish an annual sustainability report that includes JPMorgan Chase’s sustainability profile. In addition to the implementation of its sustainability policies and objectives, JPMorgan Chase will use a common framework for sustainability reporting such as the Global Reporting Initiative. JPMorgan Chase aims to also perform periodic environmental policy reviews to ensure compliance with existing policies and assess the need for additions to, or changes in, such policies.

The annual environmental and sustainability reports will set goals for the following year and report on progress made on achieving the previous year’s goals.

c. Governance Structure

The Office of Environmental Affairs reports to a member of the Executive Committee and is overseen by the Public Responsibility Committee of the Board. In addition, a firm-wide Environmental Oversight Committee made up of key business leaders is responsible for guiding the Office's initiatives.

  1. Global Reporting Initiative (GRI) - The Global Reporting Initiative (GRI) is a multi-stakeholder process and independent institution whose mission is to develop and disseminate globally applicable Sustainability Reporting Guidelines. These Guidelines are for voluntary use by organizations for reporting on the economic, environmental, and social dimensions of their activities, products, and services.
  2. In implementing this policy, we will take guidance from the major conservation groups, the Wye River Process and the World Bank’s Critical Forest Areas. Our policy will include the following conservation values: rare, endemic, threatened and endangered species, legally protected areas and forests that house vulnerable or threatened cultural sites.
  3. There are currently 788 World Heritage sites that were nominated by the member countries and selected by independent review panels for their natural and cultural values.
  4. Tropical moist forest is generally defined as forest in areas that receive not less than 100 mm of rain in any month for two out of three years and have an annual mean temperature of 24oC or higher. Also included in this category, however, are some forests (especially in Africa) where dry periods are longer but high cloud cover causes reduced evapotranspiration. Primary forest is defined as relatively intact forest that has been essentially unmodified by human activity for the previous 60 to 80 years.
  5. Critical natural habitats are:

    i) existing protected areas and areas officially proposed by governments as protected areas (e.g., reserves that meet the criteria of the World Conservation Union [IUCN] classifications), areas initially recognized as protected by traditional local communities (e.g., sacred groves), and sites that maintain conditions vital for the viability of these protected areas (as determined by the environmental assessment process); or

    ii) sites identified on supplementary lists prepared by the World Bank or an authoritative source determined by IFC’s Environment Division. Such sites may include areas recognized by traditional local communities (e.g., sacred groves); areas with known high suitability for biodiversity conservation; and sites that are critical for rare, vulnerable, migratory, or endangered species. Listings are based on systematic evaluations of such factors as species richness; the degree of endemism, rarity, and vulnerability of component species; representativeness; and integrity of ecosystem processes.

  6. Significant conversion is the elimination or severe diminution of the integrity of a critical or other natural habitat caused by a major, long-term change in land or water use. Significant conversion may include, for example, land clearing; replacement of natural vegetation (e.g., by crops or tree plantations); permanent flooding (e.g., by a reservoir); drainage, dredging, filling, or channelization of wetlands; or surface mining. In both terrestrial and aquatic ecosystems, conversion of natural habitats can occur as the result of severe pollution. Conversion can result directly from the action of a project or through an indirect mechanism (e.g., through induced settlement along a road). 
  7. Degradation is modification of a critical or other natural habitat that substantially reduces the habitat's ability to maintain viable populations of its native species.
  8. Local Communities - describes the broad group of people living in or near a forest or plantation, with some significant level of dependence on it. The term includes forest dwellers, indigenous forest-adjacent populations, and recent immigrants.
  9. Including those laws related to the ratification and implementation of “Convention 169 Concerning Indigenous & Tribal Peoples in Independent Countries” of the ILO.
  10. The Forest Stewardship Council (FSC) is an international organization devoted to encouraging the responsible management of the world’s forests. FSC sets high standards that ensure forestry is practiced in an environmentally responsible, socially beneficial, and economically viable way. According to the UK government, FSC is one most stringent forest certification programs and is widely accepted by conservation groups. Its standards protect streams, conserve endangered forests and species habitat, and require the involvement of indigenous communities. There are other credible, internationally recognized forest stewardship certification schemes that generally recognize that timber is produced legally and comes from broadly sustainable sources.
  11. Illegal logging takes place where timber is harvested in violation of local and national laws intended to stop illegal logging. Illegal logging includes: a) using corrupt means to gain access to forests, b) extraction without permission or from a legally unauthorized area, c) the cutting of protected species or the extraction of timber in excess of legal limits or in violation of legally approved forest management plans. Illegal logging has not yet been written into international law although issues relating to illegal logging have been addressed in some fashion by international treaties such as the Convention on Biological Diversity.
  12. The World Bank, World Wildlife Fund and others have published data on illegal logging. For JPMorgan Chase, a high risk country is one where greater than 50% of annual harvest is illegal.


IFC Responds to Financial Institutions

Washington D.C. - 24 January 2005

Following a call from financial institutions to extend the time period for the Safeguard Policy review, the IFC has extended the public consultation period to 29 April 2005.

Dear Equator Banks,

I am writing in response to your letter dated 14 December, 2004, and to thank you for receiving IFC at WestLB’s offices in New York the previous week. I would like to respond to some of the points you offered in your letter.

I believe that your concerns have been largely addressed by our decision to extend the original 17 December deadline for the close of public consultation, and with the planned release of the Guidance Notes, formerly called Interpretation Notes, on 31 January, 2005. The public consultation will now close on 29 April, 2005, to allow sufficient time for the Performance Standards to be studied side by side with the Guidance Notes. An indicative draft policy will also be released on 31 January, showing the range of external comments received during the consultation.

Your commitment to work closely with IFC in an iterative fashion is greatly welcomed, and the outcome will, I believe, ensure that the Performance Standards are appropriate for use by private-sector financial institutions, including Equator, as well as for IFC in its leadership role as a development institution.

IFC looks forward to continuing close and detailed dialogue with the Equator Principles’ banks, so that together we can make great strides in social and environmental sustainability and development impact.

Yours sincerely,

Rachel Kyte


Environment & Social Development Department

-2- January 24, 2005

Banco Itau S.A.
Bank of America, N.A.
Barclays plc
Calyon Corporate and Investment Bank
Citigroup Inc.
Dexia Group
Credit Suisse First Boston
Eksport Kredit Fonden
HSBC Group
HVB Group
KBC Bank N.V.
Mizuho Corporate Bank, Ltd.
The Royal Bank of Scotland plc
Standard Chartered Bank

-3- January 24, 2005

bcc: Messrs. Bulmer, Cowan, Ms. Aizawa


IFC Conducts Training for Banks on the Implementation of Equator Principles

Rome - 12 May 2004

International Finance Corporation (IFC) conducted a training programme in Rome this week for banks that have adopted the Equator Principles. The programme was designed for professionals working in project finance, corporate finance, credit, legal, customer relations and other relevant areas dealing with environmental and social risk management within banks. The programme covered risk assessment, categorizing projects, selecting appropriate assessment tools and identifying value-added solutions for project sponsors. Representatives of nine banks attended the programme conducted in Rome. IFC has, in addition, conducted training programmes on the Equator Principles at individual banks, customized to their needs. To date, a total of thirteen banks have received training from IFC, and IFC estimates it has trained 365 professionals at banks that have adopted the Equator Principles.


Twelve Banks Speak Out on the Extractive Industries Review

Washington D.C. - 5 May 2004

Eleven of the banks that have adopted the Equator Principles have written a joint letter to the World Bank President, James Wolfensohn, to express their views on the Extractive Industries Review (EIR). Another bank has sent a separate letter to Mr. Wolfensohn stating its concerns.

In the joint letter, the banks expressed their concerns about EIR recommendations that the World Bank Group (WBG) withdraw from lending to coal immediately and to oil by 2008. The letter states that the banks believe the "EIR has not given sufficient consideration to the fact that the extractive industries are essential to global economic growth and poverty reduction, and that for some countries the extractive industries represent a very important means of creating revenue for government programs."

The banks expressed concern about an EIR recommendation that it should be a precondition of WBG investment that countries have robust governance criteria in place. The banks said that "a country's current inability to meet robust WBG governance criteria should not prevent that country from gaining access to the support, both financial and structural, that is required in order to develop such governance mechanisms. Otherwise, countries that are most in need of such developmental assistance could be excluded ... and will either remain mired in poverty or find less desirable paths to develop their extractive potential."

They also expressed concern about EIR recommendations concerning 'prior informed consent,' and stated the view that the implementation of the WBG Safeguard Policies is intended to result in effective consultation with affected groups and tangible benefits for local communities.

The banks did support the EIR recommendation for increased transparency on revenues paid to governments.

For the full text of the banks' letter, see EIR Banks Letter (pdf - 90k).


IFC Conducts an Equator Principles Workshop

Washington D.C. 18 March 2004

IFC held a workshop on social risk assessment for banks which have adopted the Equator principles. The workshop was held at IFC's offices in Washington on 11 March, 2004. Among the topics discussed were IFC's experience in managing social assessments and issues relating specifically to resettlement, indigenous people and cultural property. There was discussion of how to identify vulnerabilities to social issues in project development. Other topics discussed included sharing of project benefits with local communities, transparency, and promoting effective consultation and stakeholder engagement.



BTC Project is the First Major Test of the Equator Principles

London - 27 February 2004

The $3.6 billion Baku-Tblisi-Ceyhan oil pipeline project, financing for which closed on February 3, 2004, was the first major test of the Equator Principles. Because implementation of the project required resolution of sensitive environmental and social issues, the project was categorized by banks as a "Category A" project under the Equator Principles. BTC thus became the first project treated as Category A under the Equator Principles.

BTC will transport oil from Azerbaijan through Georgia to the Turkish port of Ceyhan. The principal developer and operator of the pipeline is BP, a global energy company with world-class capabilities to manage complex environmental and social situations. The pipeline solves the thorny question of how to commercialize Caspian oil without shipping it through the fragile and overcrowded Bosporus Straits.

The project presents a number of environmental and social challenges, including pipeline routing near potentially critical natural habitats, the claims of a number of groups for special recognition and compensation, seismic activity along parts of the route, and political turmoil in Georgia. The financing consortium initially included four private-sector banks, as well as IFC, EBRD and OPIC, which each have extensive environmental and social policies and staff experienced in environmental and social issues evaluation. The consortium developing BTC conducted comprehensive reviews. The senior lenders engaged an independent consultant, Mott MacDonald, to conduct due diligence and assess compliance with the Equator Principles. It was decided that an independent consultant would also be used to assess the project going forward and to monitor the project's compliance with its environmental and social management plan.

There was opposition to the project development by several NGOs which alleged 127 "violations" of IFC Safeguard Policies and therefore of the Equator Principles. IFC took the unusual step of issuing a rebuttal to the NGO criticism.

The banks involved in the financing evaluated the criticisms and conducted extensive due diligence on environmental and social issues with BP as well as with IFC and other agencies involved in the financing. As a result of their evaluations, eight banks which have adopted the Equator Principles concluded that the project had complied with IFC Safeguard Policies and the Equator Principles. Mott MacDonald confirmed this assessment. The IFC Board also concluded that its Safeguard Policies had been met. US Eximbank, which effectively applies IFC Safeguard Policies, came to the same conclusion, and the project was also approved by EBRD, OPIC and four other export credit agencies.

BTC is the first major application of the Equator Principles. Because the Safeguard Policies referenced in the Equator Principles are processes and questions to be asked, they require significant judgment on the part of the banks. This means that, in spite of intensive work and good faith by all parties, people can differ on their conclusions. In this case, while some NGOs have a different view, the private-sector banks, the multilateral and bilateral agencies, the sponsors and the host governments all believe that this project incorporates significant measures to respect the environment and social concerns, and should go forward.

There is extensive public disclosure and consultation concerning BTC. The project maintains a comprehensive website. NGO criticisms are also accessible on the web, as is IFC's rebuttal of NGO criticism. ABN AMRO issued a statement on its application of the Equator Principles to the BTC project. Mott MacDonald's report is also available.

For more information on BTC, see:

BTC project website
WWF criticism
IFC rebuttal
ABN AMRO statement


Banks Hold Implementation Conference

Amsterdam - 5 January 2004

Eighteen banks which have adopted the Equator Principles met in Amsterdam on 15 December, 2003, for an Implementation Conference. The topics discussed by the banks included the Equator Principles' categorization process, training in environmental and social issues assessment, internal business and risk management models being put in place to deal with banks' implementation of the Equator Principles, and the timing of each banks' implementation steps. There was also discussion of consultants with environmental or social issues capability. IFC sent several representatives to the meeting to discuss IFC's training program for banks which have adopted the Equator Principles. The conference resulted in in banks sharing their implementation steps to date, discussing implementation areas of concern, and learning more about each others' risk management processes.


Linklaters Comments on the Equator Principles

London - 23 July 2003

The Equator Principles – protecting green shoots

The recent launch of the “Equator Principles” casts a fresh light on the environmental and social impacts of project financing, particularly in the emerging markets. The banks who have adopted the “Equator Principles” aim to address environmental and social issues in their review of project proposals and to require sponsor compliance with environmental and social policies that are based on World Bank/IFC requirements

Read more...

Equator Principles – New Environmental and Social Guidelines for Project Finance Transactions

New York - 18 June 2003 and London - June 2003

Two prominent project finance law firms, Sullivan & Cromwell in the US, and Norton Rose in the UK, have issued commentary on the Equator Principles to their clients. In its letter to clients, Sullivan & Cromwell said that the Equator Principles represent a step towards the adoption of IFC's environmental standards "even where financing is expected to come primarily from private sources of capital. Sponsors should continue to plan larger projects, especially in low- and middle-income countries, with a view towards adopting these policies and procedures." In assessing the implications of the Equator Principles for lenders, Norton Rose recommends that "lenders should from now on include specific reference to the Equator Principles when negotiating term sheets." In assessing their impact on borrowers, Norton Rose commented that "in many instances the application of the Equator Principles will not significantly increase the compliance burden faced by project sponsors. However, the Equator Principles will impose additional burdens in some areas," particularly in the emerging markets. "The guidelines are significant in that they impose requirements in relation to the social implications of projects."

Full text of Sullivan & Cromwell's letter (pdf - 109k)

Full text of Norton Rose's letter (pdf - 138k)