20 February 2012 - Forest Peoples Programme

Principle 3 provides the ‘Applicable Social and Environmental Standards’ which are supposed to be implemented according to the requirements of the remaining 9 principles. The Applicable Social and Environmental Standards are the Performance Standards of the International Finance Corporation (IFC) plus other relevant Environmental, Health and Safety Guidelines, although ‘justified deviation’ from these standards is permitted. In August 2011, the IFC Board adopted a revised set of Performance Standards and, in late 2011, the Equator Principles Association adopted these revised IFC Performance Standards in their entirety into the Applicable Social & Environmental Standards, Principle 3, of the Equator Principles. This incorporation became effective on 1 January, 2012. Read More.

15 February 2012 - CSR Asia, Brian Ho

Since the second half of 2011 there have been various news reports about the difficulties for companies, especially small and medium sized enterprises, to receive business loans in China due to a tightening of bank policy. Some banks have been criticised for increasing the interest rates through different measures and causing SMEs in China to go for usurious loans. There are some cases where business people have committed suicide or have become “runaway bosses” as they cannot repay the business loan. However, when comparing the banking industry with other industries, profit in the financial sector is maintained at high level. Criticism about the social responsibility of banks, especially state-owned ones, has appeared in mainstream media and the public has come to the consensus that banks should be more socially responsible and support those companies and local economies that need help. CSR has become an important agenda for the banking industry. Read More.

10 December 2011 - Prizma Blog

Prizma’s Bill Kennedy was recently invited to participate at the 6^th Sustainability Management Conference in Seoul, Korea.  The focus of the event, sponsored by the Korean Standards Association and the Ministry of Knowledge Economy, was an examination of the IFC Performance Standards, the Equator Principles and OECD’s Guidelines for Multinational Enterprises and the way in which companies and banks have been responding to them.  Read More.

8 December 2011 - Business Day Online, Ayodele Oni

The Equator Principles represent a credit risk management framework for determining, assessing and managing environmental and social risk for transactions requiring Project Finance. Project finance on the other hand, is a means of funding in which the lender or financier looks primarily to the revenues generated a project, as opposed to the balance sheet, both as the source of repayment and as security for the exposure. Project Finance, plays an important role in financing energy projects and infrastructural development throughout the world. This financing method, is usually for large, complex and expensive installations, infrastructure and structures and would include, for example, power plants, chemical processing plants, mines, transportation infrastructure such as trains and telecommunications infrastructure. Read More.

29 November 2011 - Project Finance Magazine

There has been persistent scepticism about the Equator Principles’ ability to encourage best practice at participating banks. But evidence from the mining industry is that they are changing sponsor behaviour. By Christopher Langdon and Claudia O’Brien, partners, Latham & Watkins. Since 2003, Equator Principles financial institutions, most of them major banks, have provided about 85% of the world’s project finance capacity. These institutions provide financing only to projects that comply with the Equator Principles, a voluntary set of guidelines designed to ensure large projects are financed in socially and environmentally responsible ways. Read More.

17 November 2011 - China Daily, Wei Tian

The carbon market in China has "substantial" potential, and will be decisive to the global carbon price once a national system emerges, Rachel Kyte, Vice-President of the World Bank, said on Wednesday. … Kyte called for more Chinese banks to sign up for the Equator Principles, a set of guidelines that require signatory banks to take into account environmental and social issues when financing development projects.  … "Chinese banks are increasingly global players, and it would be important to see major banks in China adopting a principle that is also globally recognized," Kyte said. Read More.

The Equator Principles Association has begun compiling its second major revision to the eponymous guidelines for managing environmental and social risks in project finance. The association held its largest ever annual meeting last month, with close to 100 people attending, where options for revising the principles were presented. The review follows a revision to the International Finance Corporation Performance Standards, upon which the Equator Principles are based, and an independent report published earlier this year. Read More.

7 November 2011 - International Rivers

The controversial Belo Monte Dam, slated for construction in Brazil's Amazon region, does not meet the standards of an international framework used by the world's largest private banks to evaluate sustainability, say human rights groups in Brazil. In a letter sent to Itaú, Banco do Brasil, Bradesco, Santander, and Caixa Econômica Federal, 150 Brazilian social and environmental organizations warned that Belo Monte developer Norte Energia, S.A. (NESA) has not complied with the Equator Principles, a set of voluntary standards created in 2003 that aid private financiers in assessing and managing social and environmental risk in project finance. As signatories of the Equator Principles, the five banks commit to not providing loans to projects where the borrower will not or is unable to comply with the Principles' respective social and environmental policies and procedures. Read More.

A banking industry initiative on social and environmental risks in project finance should become more transparent and expand its scope, according to campaigners. Financial institutions that have signed up to the Equator Principles (EPs) – a credit risk management framework for determining, assessing and managing environmental and social risk in project finance transactions – are meeting in Washington, DC this week to discuss a third update to the EPs.  This follows the recent update to the IFC’s Performance Standards, upon which the EPs are based, and a review published in May. Read More.

24 October 2011 - Sustainability Investment News , Robert Kropp

As the Equator Principles Association prepares a draft of new principles, BankTrack calls for increased transparency and more attention to climate change and human rights. Banks subscribing to the Equator Principles commit to managing environmental and social risks in their project finance transactions. At present, 70 banks in 27 countries have been designated as Equator Principles Financial Institutions (EPFIs). EPFIs fulfill their mission by not financing projects that are not in compliance with social and environmental policies and procedures established by the International Finance Corporation (IFC) and the World Bank. Four of the 70 EDFIs—Bank of America, Citigroup, Ex-Im Bank, and JPMorgan Chase—are based in the US. The Equator Principles Association is scheduled to release a draft text of its new version of the Principles this week, a step made necessary by the publication in August of a new Sustainability Framework by IFC. In advance of the Association's draft text, BankTrack, a Netherlands-based nongovernmental organization (NGO), has published recommendations to ensure that the draft text makes "a positive difference to project affected communities and to the environment.” Read More.