New 'Equator Principles' will extend environmental assessment to more project finance arrangements

16 May 2013 - Out-Law

A new version of the 'Equator Principles', which establish an environmental and social risk management framework for project financiers, will cover a wider range of funding arrangements. The third version of the Equator Principles (EP III) will take effect from 4 June, and should be applied to all new transactions from 1 January 2014. The new principles will apply to project-related corporate loans and short-term 'bridge' loans, in addition to project financing arrangements.  Environment and energy law expert Eluned Watson of Pinsent Masons, the law firm behind, said that the new principles would have "important implications, risks and opportunities" for both lenders and those seeking financial capital for projects. Read More.

Equator Principles III approved

17 May 2013 - Lexology, Fasken Martineau DuMoulin LLP, Claudia Feldkamp, Kevin O’Callaghan

On May 14, 2013, the Equator Principles Association announced the adoption of Equator Principles III (“EP III”), the latest, and most robust, iteration of influential international norms for minimizing the negative environmental and social impacts of resource and infrastructure projects on local communities and environments. The adoption of EP III follows a lengthy consultation process that included a wide array of international CSR stakeholders and will formally take effect on June 4, 2013. Once in place, EP III will apply to all new infrastructure and resource projects financed by institutions that adhere to the Equator Principles (as well as expansions or upgrades of existing projects that create new significant environmental and social risks and impacts or change the nature or degree of an existing impact as originally assessed under EP II). Read More.

Equator Principles – Creating New Regulators or the Extra Mile?

16 May 2013 - Prizma, Mehrdad Nazari

A recent note on the LinkedIn site of the International Council on Mining and Metals (ICMM) suggests that Equator Principles Financial Institutions (better known as Equator Banks) are emerging as the new 'regulators'. Is this real or desirable?  The third generation of the Equator Principles (EP3) was recently launched. Read More.

Financial institutions that have signed up to the Equator Principles (EP) have backed a new, more robust, version of the voluntary rules for banks’ project finance activities

14 May 2013 - Environmental Finance

Financial institutions that have signed up to the Equator Principles (EP) have backed a new, more robust, version of the voluntary rules for banks’ project finance activities. Read More.

Approved and Released - Equator Principles III

14 May 2013

Equator Principles (EP) Association Members have given overwhelming support to EP III - the third and most robust version of the EP to date. The vote in favour of EP III means that from 4 June 2013 more deals will be assessed under a strengthened environmental and social risk management framework.

The EP framework for determining, assessing and managing environmental and social risk in project finance transactions has extended its scope to Project-Related Corporate Loans and Bridge Loans, and clarifies the requirements for application to Advisory Services. Under EP III, Equator Principles Financial Institutions (the name for adopters of the EP) will benefit from greater consistency in implementation, enhanced transparency through extended reporting and will address emerging environmental and social concerns.

Read more...

Equator Principles III is coming – new trends and a strategy rethink

10 May 2013 - Lexology, Michael Torrance

The Equator Principles (EP) is an agreement amongst 76 global financial institutions to apply environmental and social standards to certain investment decisions. The third iteration of the EP is set to be released in 2013 (EP III). A draft of EP III was released in August 2012 suggesting what the final contents may look like. The release of EP III follows a major revision of the IFC Performance Standards on Environmental & Social Sustainability in 2012 (IFC Performance Standards), a set of guidelines that is incorporated by reference into the EP framework. Together, these changes mark an important evolution in best practice in environmental and social risk management of particular importance for both bankers and those seeking access to capital. Read More

Otkritie Bank becomes the first bank in Russia to adopt the Equator Principles

Moscow, 15 April 2013

On April 15, 2013 Otkritie Bank (OJSC) became the first Russian bank to join the Equator Principles Association. By adopting the Principles, Otkritie Bank has declared its commitment to sustainable finance and its readiness to take into account social and environmental considerations in major project financing.

The Equator Principles are a credit risk management framework for identifying, assessing, and managing environmental and social risk in project finance. The principles are adopted voluntarily by financial institutions and are applied where total project capital costs exceed US$10 million. The Principles are based on the International Finance Corporation’s (IFC) Performance Standards on Environmental and Social Sustainability, and on the World Bank Group’s Environmental, Health and Safety Guidelines.

At present, 78 banks, including ABN Amro, BNP Paribas, Barclays, Bank of America, Citigroup, Credit Suisse, HSBC, Societe General, and Unicredit have adopted the Equator Principles.

According to the Chairman of the Board of Otkritie Bank, Alexey Gonus, collaboration between the Bank and corporate clients in this area has a positive impact on the reputation of all concerned. "Worldwide, there is increasing attention on businesses’ social responsibility. This being the case, our acceptance of the Equator Principles will, first and foremost, help to show that the words "social responsibility" and "sustainable future" have real meaning for us and our customers."

Read more...

Shifting the equator

Canada - 25 February 2013 – ListedMag, Sandra Odendahl

Most banks assess the social and environmental impact of major resource-based projects they finance using the Equator Principles. And those principles might soon look very, very different.  If you work in mining, oil and gas, power generation or any other intensive resource-based industry, you are probably familiar with the Equator Principles—a framework used by major banks to assess the social and environmental impact of financed projects. What you may not know is that in 2013, the Equator Principles are slated to look very, very different—more prescriptive and wide-ranging—with changes that will affect availability, access, terms and reporting requirements for project financing all over the world.  Read More.

Revising the Equator Principles: Why Banks should not become the New Sustainability Regulators of Emerging Markets

29 January 2013 - World Growth

On 13 August 2012 a draft of the updated Equator Principles (EP) was released for stakeholder consultation and public comment. This latest revision of the EP is a marked attempt to dramatically alter the role of financial institutions in emerging markets, from financiers to sustainability regulators.  By writing certain levels of environmental and social performance into Project Finance documentation, which go beyond the levels prescribed by national law, EP lenders (EPFIs) become obligated to monitor, verify and remedy borrower compliance with sustainability standards. Read More.

Cross-Sector Biodiversity Initiative Launched

6 February 2013

ICMM, IPIECA (the global oil and gas industry association for environmental and social issues) and the Equator Principles Association have launched a cross-sector biodiversity initiative (CSBI) in Washington, D.C.

The initiative has been created to develop and share good practices and practical tools to apply the new International Finance Corporation's (IFC) performance standard 6 on biodiversity conservation. IFC's performance standards have become globally recognized as a benchmark for environmental and social risk management in the private sector.

Read more...