Sustainable finance: how far have the Equator Principles gone?

15 November 2012 - The Guardian, Oliver Balch

"Sustainable finance" finds itself very much in vogue these days. That wasn't the case ten years ago. Back then, bankers, insurers and investment folk wore suits, talked numbers, struck deals – and left worrying about the outside world to others. Today's shift in attitudes can arguably be dated back to early June 2003, when 10 international banks pledged to start applying social and environmental criteria to their lending. This wasn't your usual eco-banking small fry. The club included many of the big hitters of the day: Barclays, Citigroup, Credit Suisse and Rabobank, among others. Binding them all together was a set of rules and guidance documents that they called the Equator Principles. The banks behind the principles set two strict parameters right from the start. Read More.

Potential extension in scope of the Equator Principles

14 November 2012 - Lexology, Stephenson Harwood, Andrew Wiseman and Anita Kasseean

The Equator Principles are a set of voluntary social and environmental guidelines by which approximately 77 banks and other financial institutions (known as the Equator Principles Financial Institutions (EPFIs)) have agreed to be bound in making project finance decisions. EPFIs can refuse to provide loans to projects where the borrower is unable or unwilling to comply with their social and environmental policies and procedures. On 13 August 2012 the Equator Principles Association released a draft of the third version of the Equator Principles (EP3) for stakeholder consultation and public comment. The consultation period closed on 12 October 2012. Read More.

The Equator Principles to embrace climate change considerations

13 November 2012 - Lexology, Jones Day, Chris Papanicolaou and James Campbell

The Equator Principles, "a credit risk management framework for determining, assessing and managing environmental and social risk" in project finance deals, arose from a 2002 meeting in London among nine international banks and the International Finance Corporation of the World Bank.  Equator Principles Financial Institutions ("EPFI") voluntarily agree not to provide "project related loans and project finance advisory services to projects where the borrower will not, or is unable to comply with, the Equator Principles." Read More.

BankTrack comments on draft Equator Principles III

12 October 2012 - BankTrack

BankTrack, the international NGO network monitoring investment decisions and sustainability commitments of large international banks, today submitted its comments on the Equator Principles III draft text (EPIII). The submission followed a meeting in London on September 25 where BankTrack shared its view on EPIII with the Equator Principles Association.  Read More.

BankTrack not Satisfied with new Draft of Equator Principles

12 October 2012 - Social Funds, Sustainability Investment News - Robert Kropp

While acknowledging that the new draft is an improvement, the Netherlands-based NGO finds insufficient commitments by signatory banks to transparency, human rights, and climate change mitigation. Some of the most environmentally damaging practices of the extractive industries - mountaintop mining and extensive deforestation, to name but two-remain perfectly legal, despite their contributions to climate change and destructive effects on communities. Such operations require a great deal of money; and since policymakers in the US and elsewhere seem unprepared to outlaw the practices, the Equator Principles were launched in 2003 to bring the management of environmental and social risks to Project Finance transactions. Read More.

Equator Principles to be extended and strengthened but still no bite

11 October 2012 - Environment Bulletin, Herbert Smith

The Equator Principles Association (EPA) has released a third version of the Equator Principles (EPs) for public consultation and comment. The EPA's stated purpose in updating the EPs is to ensure that they remain "gold standard" for environmental and social risk assessment and management in financing. The key changes proposed by the draft are the extension of the application of the EPs beyond their current project finance scope to cover project-related corporate and bridge loans, a greater emphasis on human rights and climate change, and enhanced monitoring and reporting requirements for lenders and borrowers. Read More.

Banking on Sustainability: Is the Financial Sector Doing Enough?

27 September 2012 - Guardian Sustainable Business Blog, Roger Cowe

There is talk of culture change and low carbon principles in the global banking sector, but the industry must do far more to build sustainability into new strategies.  ... The Equator Principles, which attempt to limit financing of damaging infrastructure projects such as destructive dams, have 77 signatories including many of the world's largest banks. A third version of the principles, originally launched in 2013, will soon be finalised, extending their scope and strengthening reporting requirements.  Read More.

International Business Obligations: Review of project financing principles

26 September 2012 - Allens - Linklaters, Louise Jenkins, Catie Shavin and Loren Atkins

The Equator Principles, which promote environmentally and socially responsible project financing, are in the process of being updated. Although, initially, it may seem that the revised principles will increase signatories' obligations, their enhanced alignment with other international standards will facilitate a streamlining of financial institutions' policies and processes. Read More.

The Revised Equator Principles Call on Companies to Seek Free, Prior, and Informed Consent. Next up Governments

7 September 2012 - Foley Hoag, Corporate Social Responsibility and the Law, Amy K Lehr

The new draft Equator Principles reflect and build upon theIFC Performance Standards’ requirement that companies obtain the free, prior, and informed consent ("FPIC") of indigenous peoples for development projects. This language reflects the UN Declaration on the Rights of Indigenous Peoples (“UNDRIP”), which was supported by all but four countries in the UN General Assembly in 2007. The four countries that originally voted against the Declaration – the United States, Canada, Australia, and New Zealand – have since reversed their positions.  Although the Declaration is a soft law instrument and therefore not binding on companies, given the broad support that it received at the UN General Assembly, it is certainly persuasive. And, in fact, national courts of countries including Belize and Colombia have begun to cite to the Declaration in their court decisions related to indigenous peoples. Read More.

Clifford Chance Comment: Draft of updated Equator Principles released

29 August 2012 - Clifford Chance

Following a strategic review of the Equator Principles ("EPs"), the Equator Principles Association, which governs membership and use of the EPs, has released a draft of the updated EPs for stakeholder consultation and public comment. As well as expanding the types of projects that will be subject to the EPs, it also proposes enhanced reporting requirements. If approved, it will be the third version of the EPs and so is known as "EPIII". This briefing sets out the principal changes. Read More.