Designated Countries

Designated Countries are those countries deemed to have robust environmental and social governance, legislation systems and institutional capacity designed to protect their people and the natural environment.

The following countries are Designated Countries.

1 Australia
2 Austria
3 Belgium
4 Canada
5 Chile
6 Czech Republic
7 Denmark
8 Estonia
9 Finland
10 France
11 Germany
12 Greece
13 Hungary
14 Iceland
15 Ireland
16 Israel
17 Italy
18 Japan
19 Korea, Rep.
20 Luxembourg
21 Netherlands
22 New Zealand
23 Norway
24 Poland
25 Portugal
26 Slovak Republic
27 Slovenia
28 Spain
29 Sweden
30 Switzerland
31 United Kingdom
32 United States

 

About Equator Principles (EP III) Update Process and Timeline

The Equator Principles (EP) Association is committed to reviewing the EPs from time-to-time to reflect ongoing learning and emerging good practice. Since the launch of the EP framework in June 2003 and a subsequent revision in 2006, there has been significant growth in the number of EP adopters from the original 10 to 75 financial institutions from 32 countries across the globe. During this period there has been significant development in environmental and social risk management practices, partly as a result of the greater challenges impacting affected communities and the environment and partly due to the changing financial landscape, particularly the ongoing financial crisis and changing public perception of the role of financial institutions.

In 2010, the EP Association initiated a Strategic Review which produced a series of recommendations on key thematic areas, namely: scope, climate change, human rights, reporting and transparency, stakeholder engagement and governance. Parallel to this, the IFC initiated a review and update of their Sustainability Framework, and their Performance Standards, which underpin the EP, were updated and re-launched in January 2012. In this context it was deemed an appropriate time to reflect on the implementation experience of EP Association members, and that of our clients, and update the EP to ensure they remain a relevant and  practical risk management tool and supportive of sustainable financing objectives.

The EP III Update process was launched in July 2011 and consists of three distinct phases. The result of the EP Update process will, if approved by members, be the third version of the Equator Principles – hence the term “EP III”.

PHASE I: Internal Consultation and Initial Drafting of EP III (July 2011 - August 2012)

Existing Working Groups and new Task Forces initiated discussions and detailed analysis for each topic area and shared proposals with the EP Association Steering Committee on how the EP framework might be updated to reflect changes to the IFC Performance Standards and current best practice. All members were invited to join the discussion groups to ensure full participation.

The Working Groups and Task Force proposals were discussed more widely with EP Association members at their Annual Meeting in October 2011 and the Working Groups and Task Forces were subsequently commissioned to provide final proposals and updated/new language for incorporation in to the EP.

The final proposals and updated/new language were examined and discussed at length by the EP Association Steering Committee and members and the first draft of EP III was approved for public release for the formal Stakeholder Consultation and Public Comment period.

PHASE II: Formal 60 day Stakeholder Consultation and Public Comment Period (August - October 2012)

The EP Association committed to carrying out a robust and consultative process. The formal 60 day stakeholder consultation and public comment period gave all interested parties and stakeholders (including EP Association members, other financial institutions, clients, industry bodies and associations, non-governmental organisations, consultants, law firms and regulatory bodies) an opportunity to review the EP III draft and provide comments. The EP Association is committed to openness, transparency and responsiveness and considered all stakeholder feedback.

The EP Association Working Groups worked with specific stakeholder groups (e.g. Industry/clients, NGOs) however the EP Association welcomed feedback and comments from any interested party on both process and substance.

PHASE III: Finalisation and Launch of EP III (October 2012 – Q1 of 2013)

The EP Association will review comments received from members and stakeholders during this period and will consult with members on amending the EP III draft.

The EP Association will not publish every comment received on the EP website however it will publish a summary (unattributed) of the key topics/issues raised during the Stakeholder Consultation and Public Comment period. The summary will include statements on how and why issues/comments have or have not been incorporated in to the EP III draft.

The EP Association will also agree a plan for the formal adoption and launch of EP III (including setting an official launch date and implementation transition period, training and communications) and will finalise all the relevant guidance notes during this period. It should be noted that the EP Association will carry out a final voting process with members, in line with the EP Association Governance Rules, to approve and re-adopt EP III.

Note that the timeline for the EP III Update process, described above, is tentative and may be extended by the EP Association as appropriate.

 

About Equator Principles (EP III) Update Process and Timeline

The Equator Principles (EP) Association is committed to reviewing the EPs from time-to-time to reflect ongoing learning and emerging good practice. Since the launch of the EP framework in June 2003 and a subsequent revision in 2006, there has been significant growth in the number of EP adopters from the original 10 to 75 financial institutions from 32 countries across the globe. During this period there has been significant development in environmental and social risk management practices, partly as a result of the greater challenges impacting affected communities and the environment and partly due to the changing financial landscape, particularly the ongoing financial crisis and changing public perception of the role of financial institutions.

In 2010, the EP Association initiated a Strategic Review which produced a series of recommendations on key thematic areas, namely: scope, climate change, human rights, reporting and transparency, stakeholder engagement and governance. Parallel to this, the IFC initiated a review and update of their Sustainability Framework, and their Performance Standards, which underpin the EP, were updated and re-launched in January 2012. In this context it was deemed an appropriate time to reflect on the implementation experience of EP Association members, and that of our clients, and update the EP to ensure they remain a relevant and  practical risk management tool and supportive of sustainable financing objectives.

The EP III Update process was launched in July 2011 and consists of three distinct phases. The result of the EP Update process will, if approved by members, be the third version of the Equator Principles – hence the term “EP III”.

PHASE I: Internal Consultation and Initial Drafting of EP III (July 2011 - August 2012)

Existing Working Groups and new Task Forces initiated discussions and detailed analysis for each topic area and shared proposals with the EP Association Steering Committee on how the EP framework might be updated to reflect changes to the IFC Performance Standards and current best practice. All members were invited to join the discussion groups to ensure full participation.

The Working Groups and Task Force proposals were discussed more widely with EP Association members at their Annual Meeting in October 2011 and the Working Groups and Task Forces were subsequently commissioned to provide final proposals and updated/new language for incorporation in to the EP.

The final proposals and updated/new language were examined and discussed at length by the EP Association Steering Committee and members and the first draft of EP III was approved for public release for the formal Stakeholder Consultation and Public Comment period.

PHASE II: Formal 60 day Stakeholder Consultation and Public Comment Period (August - October 2012)

The EP Association committed to carrying out a robust and consultative process. The formal 60 day stakeholder consultation and public comment period gave all interested parties and stakeholders (including EP Association members, other financial institutions, clients, industry bodies and associations, non-governmental organisations, consultants, law firms and regulatory bodies) an opportunity to review the EP III draft and provide comments. The EP Association is committed to openness, transparency and responsiveness and considered all stakeholder feedback.

The EP Association Working Groups worked with specific stakeholder groups (e.g. Industry/clients, NGOs) however the EP Association welcomed feedback and comments from any interested party on both process and substance.

PHASE III: Finalisation and Launch of EP III (October 2012 – Q1 of 2013)

The EP Association will review comments received from members and stakeholders during this period and will consult with members on amending the EP III draft.

The EP Association will not publish every comment received on the EP website however it will publish a summary (unattributed) of the key topics/issues raised during the Stakeholder Consultation and Public Comment period. The summary will include statements on how and why issues/comments have or have not been incorporated in to the EP III draft.

The EP Association will also agree a plan for the formal adoption and launch of EP III (including setting an official launch date and implementation transition period, training and communications) and will finalise all the relevant guidance notes during this period. It should be noted that the EP Association will carry out a final voting process with members, in line with the EP Association Governance Rules, to approve and re-adopt EP III.

Note that the timeline for the EP III Update process, described above, is tentative and may be extended by the EP Association as appropriate.

 

About Equator Principles (EP III) Update Process and Timeline

The Equator Principles (EP) Association is committed to reviewing the EPs from time-to-time to reflect ongoing learning and emerging good practice. Since the launch of the EP framework in June 2003 and a subsequent revision in 2006, there has been significant growth in the number of EP adopters from the original 10 to 75 financial institutions from 32 countries across the globe. During this period there has been significant development in environmental and social risk management practices, partly as a result of the greater challenges impacting affected communities and the environment and partly due to the changing financial landscape, particularly the ongoing financial crisis and changing public perception of the role of financial institutions.

In 2010, the EP Association initiated a Strategic Review which produced a series of recommendations on key thematic areas, namely: scope, climate change, human rights, reporting and transparency, stakeholder engagement and governance. Parallel to this, the IFC initiated a review and update of their Sustainability Framework, and their Performance Standards, which underpin the EP, were updated and re-launched in January 2012. In this context it was deemed an appropriate time to reflect on the implementation experience of EP Association members, and that of our clients, and update the EP to ensure they remain a relevant and  practical risk management tool and supportive of sustainable financing objectives.

The EP III Update process was launched in July 2011 and consists of three distinct phases. The result of the EP Update process will, if approved by members, be the third version of the Equator Principles – hence the term “EP III”.

PHASE I: Internal Consultation and Initial Drafting of EP III (July 2011 - August 2012)

Existing Working Groups and new Task Forces initiated discussions and detailed analysis for each topic area and shared proposals with the EP Association Steering Committee on how the EP framework might be updated to reflect changes to the IFC Performance Standards and current best practice. All members were invited to join the discussion groups to ensure full participation.

The Working Groups and Task Force proposals were discussed more widely with EP Association members at their Annual Meeting in October 2011 and the Working Groups and Task Forces were subsequently commissioned to provide final proposals and updated/new language for incorporation in to the EP.

The final proposals and updated/new language were examined and discussed at length by the EP Association Steering Committee and members and the first draft of EP III was approved for public release for the formal Stakeholder Consultation and Public Comment period.

PHASE II: Formal 60 day Stakeholder Consultation and Public Comment Period (August - October 2012)

The EP Association committed to carrying out a robust and consultative process. The formal 60 day stakeholder consultation and public comment period gave all interested parties and stakeholders (including EP Association members, other financial institutions, clients, industry bodies and associations, non-governmental organisations, consultants, law firms and regulatory bodies) an opportunity to review the EP III draft and provide comments. The EP Association is committed to openness, transparency and responsiveness and considered all stakeholder feedback.

The EP Association Working Groups worked with specific stakeholder groups (e.g. Industry/clients, NGOs) however the EP Association welcomed feedback and comments from any interested party on both process and substance.

PHASE III: Finalisation and Launch of EP III (October 2012 – Q1 of 2013)

The EP Association will review comments received from members and stakeholders during this period and will consult with members on amending the EP III draft.

The EP Association will not publish every comment received on the EP website however it will publish a summary (unattributed) of the key topics/issues raised during the Stakeholder Consultation and Public Comment period. The summary will include statements on how and why issues/comments have or have not been incorporated in to the EP III draft.

The EP Association will also agree a plan for the formal adoption and launch of EP III (including setting an official launch date and implementation transition period, training and communications) and will finalise all the relevant guidance notes during this period. It should be noted that the EP Association will carry out a final voting process with members, in line with the EP Association Governance Rules, to approve and re-adopt EP III.

Note that the timeline for the EP III Update process, described above, is tentative and may be extended by the EP Association as appropriate.

 

About the Equator Principles Strategic Review - 2010/2011

On 19 October 2010 the Equator Principles (EP) Association launched a Strategic Review to produce a multi-year strategic vision to ensure that the EPs continued to be viewed as the “gold standard” in environmental and social risk management for Project Finance within the financial sector.

When the Strategic Review was launched there had been significant growth in the number of EPs adopters since its inception (from ten to over 65 financial institutions from across the globe) making the EPs a leading and respected voluntary standard for the financial sector. The EP Association recognised that alongside this growth the social and environmental challenges, that concern and impact communities and the environment, had also increased.

The main aims of the Strategic Review were to assess progress to date, identify future challenges and opportunities, evaluate how best to address the issues effectively, and to take all stakeholder perspectives into account. The Strategic Review helped the EP Association:

  • take stock of the current state of the EPs and develop a better understanding of the challenges and successes to-date,
  • identify perceived areas of strength and weakness in the current EP framework through engagement with members and other stakeholders including clients and industry, civil society, and financial sector peers,
  • identify recommended action points that will lead to the successful implementation of the vision/plan, and
  • prepare for a likely update of the EPs in 2011 following the conclusion of the International Finance Corporation (IFC) Performance Standards Review and Update process (launched in Sept 2009).

Process

Following a competitive bidding process, the EP Association Steering Committee selected leading global environmental consultancy Environmental Resources Management (ERM), in partnership with independent sustainable banking consultant Suellen Lazarus, to manage the review on behalf of the EP Association, and synthesize feedback for consideration.

The EP Association elicited targeted feedback from members, financial sector peers, clients and industry bodies, and civil society and received additional feedback from interested parties.

The EP Association also held a Strategic Review meeting in Beijing (hosted by Citi China) on 1 and 2 December giving members the opportunity to examine the vision for the Equator Principles going forward. It was attended by 31 participants (including Steering Committee members and members representing each region). The Strategic Review consultants presented views gathered through surveys and direct conversations with industry, civil society, and other key stakeholders such as the IFC and other agencies. Numerous issues were debated including the 'beyond project finance' topic, transparency and disclosure, consistency in EP application, and other governance topics. The meeting also benefited of guest-speakers, including a senior representative of China's Ministry of Environmental Protection.

Results

On the 24 May 2011, the EP Association announced the conclusion of the Strategic Review process with the public release of the Executive Summary and Appendix of the Strategic Review consultant's report and associated EP Association Summary Response.

The Summary Response detailed some of the short, medium and long-term actions that the EP Association would prioritise during the EP III Update process. The Strategic Review was the first step in a longer term process to determine the future of the EPs and the EP III Update process has allowed the EP Association to fully debate and evaluate the recommendations that came out of the Strategic Review.

About the Equator Principles Strategic Review - 2010/2011

On 19 October 2010 the Equator Principles (EP) Association launched a Strategic Review to produce a multi-year strategic vision to ensure that the EPs continued to be viewed as the “gold standard” in environmental and social risk management for Project Finance within the financial sector.

When the Strategic Review was launched there had been significant growth in the number of EPs adopters since its inception (from ten to over 65 financial institutions from across the globe) making the EPs a leading and respected voluntary standard for the financial sector. The EP Association recognised that alongside this growth the social and environmental challenges, that concern and impact communities and the environment, had also increased.

The main aims of the Strategic Review were to assess progress to date, identify future challenges and opportunities, evaluate how best to address the issues effectively, and to take all stakeholder perspectives into account. The Strategic Review helped the EP Association:

  • take stock of the current state of the EPs and develop a better understanding of the challenges and successes to-date,
  • identify perceived areas of strength and weakness in the current EP framework through engagement with members and other stakeholders including clients and industry, civil society, and financial sector peers,
  • identify recommended action points that will lead to the successful implementation of the vision/plan, and
  • prepare for a likely update of the EPs in 2011 following the conclusion of the International Finance Corporation (IFC) Performance Standards Review and Update process (launched in Sept 2009).

Process

Following a competitive bidding process, the EP Association Steering Committee selected leading global environmental consultancy Environmental Resources Management (ERM), in partnership with independent sustainable banking consultant Suellen Lazarus, to manage the review on behalf of the EP Association, and synthesize feedback for consideration.

The EP Association elicited targeted feedback from members, financial sector peers, clients and industry bodies, and civil society and received additional feedback from interested parties.

The EP Association also held a Strategic Review meeting in Beijing (hosted by Citi China) on 1 and 2 December giving members the opportunity to examine the vision for the Equator Principles going forward. It was attended by 31 participants (including Steering Committee members and members representing each region). The Strategic Review consultants presented views gathered through surveys and direct conversations with industry, civil society, and other key stakeholders such as the IFC and other agencies. Numerous issues were debated including the 'beyond project finance' topic, transparency and disclosure, consistency in EP application, and other governance topics. The meeting also benefited of guest-speakers, including a senior representative of China's Ministry of Environmental Protection.

Results

On the 24 May 2011, the EP Association announced the conclusion of the Strategic Review process with the public release of the Executive Summary and Appendix of the Strategic Review consultant's report and associated EP Association Summary Response.

The Summary Response detailed some of the short, medium and long-term actions that the EP Association would prioritise during the EP III Update process. The Strategic Review was the first step in a longer term process to determine the future of the EPs and the EP III Update process has allowed the EP Association to fully debate and evaluate the recommendations that came out of the Strategic Review.

About the Equator Principles Strategic Review - 2010/2011

On 19 October 2010 the Equator Principles (EP) Association launched a Strategic Review to produce a multi-year strategic vision to ensure that the EPs continued to be viewed as the “gold standard” in environmental and social risk management for Project Finance within the financial sector.

When the Strategic Review was launched there had been significant growth in the number of EPs adopters since its inception (from ten to over 65 financial institutions from across the globe) making the EPs a leading and respected voluntary standard for the financial sector. The EP Association recognised that alongside this growth the social and environmental challenges, that concern and impact communities and the environment, had also increased.

The main aims of the Strategic Review were to assess progress to date, identify future challenges and opportunities, evaluate how best to address the issues effectively, and to take all stakeholder perspectives into account. The Strategic Review helped the EP Association:

  • take stock of the current state of the EPs and develop a better understanding of the challenges and successes to-date,
  • identify perceived areas of strength and weakness in the current EP framework through engagement with members and other stakeholders including clients and industry, civil society, and financial sector peers,
  • identify recommended action points that will lead to the successful implementation of the vision/plan, and
  • prepare for a likely update of the EPs in 2011 following the conclusion of the International Finance Corporation (IFC) Performance Standards Review and Update process (launched in Sept 2009).

Process

Following a competitive bidding process, the EP Association Steering Committee selected leading global environmental consultancy Environmental Resources Management (ERM), in partnership with independent sustainable banking consultant Suellen Lazarus, to manage the review on behalf of the EP Association, and synthesize feedback for consideration.

The EP Association elicited targeted feedback from members, financial sector peers, clients and industry bodies, and civil society and received additional feedback from interested parties.

The EP Association also held a Strategic Review meeting in Beijing (hosted by Citi China) on 1 and 2 December giving members the opportunity to examine the vision for the Equator Principles going forward. It was attended by 31 participants (including Steering Committee members and members representing each region). The Strategic Review consultants presented views gathered through surveys and direct conversations with industry, civil society, and other key stakeholders such as the IFC and other agencies. Numerous issues were debated including the 'beyond project finance' topic, transparency and disclosure, consistency in EP application, and other governance topics. The meeting also benefited of guest-speakers, including a senior representative of China's Ministry of Environmental Protection.

Results

On the 24 May 2011, the EP Association announced the conclusion of the Strategic Review process with the public release of the Executive Summary and Appendix of the Strategic Review consultant's report and associated EP Association Summary Response.

The Summary Response detailed some of the short, medium and long-term actions that the EP Association would prioritise during the EP III Update process. The Strategic Review was the first step in a longer term process to determine the future of the EPs and the EP III Update process has allowed the EP Association to fully debate and evaluate the recommendations that came out of the Strategic Review.

The Equator Principles III - 2013

The Equator Principles (EP) III is effective from 4 June 2013.

TRANSLATIONS

EP III is now available for download in the following languages:

Please note that these translations were carefully prepared to ensure the accuracy and integrity of the content, however, the EP Association does not accept any responsibility for omissions or discrepancies, and cannot guarantee that users will interpret the content as originally intended. The official version of EP III is published in English and users should refer to it should they have any doubts in their understanding.

TRANSITION PERIOD

The transition period for EP III ended on 31 December 2013 and EP III is mandatory for all new transactions (where the mandate is signed after 31 December 2013) from 1 January 2014. EP III does not apply retroactively therefore EP Association Members are not expected to switch from EP II to EP III for transactions where the mandate was signed before 1 January 2014.

The EP Association Steering Committee accepts that in certain situations there might be legal constraints that prevent EP Association Members applying EP III from 1 January 2014, however each member should make all necessary efforts to ensure EP III is incorporated into their institution's review of transactions according to their own risk management frameworks and engagement with clients from this date.

OVERVIEW OF KEY CHANGES - EP II TO EP III

Changes Reflecting Priorities and Recommendations from the EP Strategic Review
TOPIC EP II EP III
Scope
  • Project Finance
  • Project Finance Advisory
  • Project Finance
  • Project Finance Advisory
  • Project-Related-Corporate Loans
  • Bridge Loans
EP Association Member Public Reporting

High level reporting:

  • Number of “Transactions Screened and Closed” and categorisation.
  • Info on implementation process.

Minimum requirements:

  • Number of “Projects Closed”  including: categorisation, sector, region and whether an independent review has taken place.
  • Project Names for Project Finance deals (subject to client consent).
  • Info on EP implementation process including roles and responsibilities, staffing, policies and procedures.
  • Details on training mandatory for first year of EP adoption.
Client Public Reporting
  • Not applicable.
  • Online summary of Environmental and Social Impact Assessment.
  • Greenhouse Gas (GHG) emission levels for projects emitting over 100,000  tones of CO2 annually during operational phase.
Changes to Align with the Updated IFC performance Standards
TOPIC EP II EP III
Social
  • Social risks due diligence.
  • “Free Prior Informed Consultation”.
  • Social and relevant human rights due diligence.
  • “Free Prior Informed Consent” in specific circumstances.
  • Explicit reference to address human rights in the Preamble.
  • Reference to “Guiding Principles on Business and Human Rights, Implementing the UN Protect, Respect and Remedy Framework”.
Climate
  • As part of World Bank Group Environmental, Health and Safety (EHS) guidelines and general due diligence.
  • Attention in due diligence.
  • Alternative analysis for high emitting projects in line with Performance Standard 3.
  • Explicit reference to address climate change in the Preamble.
  • Project reporting requirements on GHG emission levels:
    • Mandatory: projects emitting + 100K tonnes of CO2.
    • Encouragement: projects emitting + 25K tonnes of CO2.
Language Alignment
  • Environmental and social risks.
  • Environmental and social risks and impacts.
Changes to Address Consistency and Support EP Implementation
TOPIC EP II EP III
Information Sharing
  • Not applicable however though carried out on an informal basis.
  • Formalised approach for EP Association Members to share information related to environmental and social matters with other mandated financial institutions .
Country Designation
  • Assessment process in High-Income OECD Countries is an acceptable substitute for the IFC Performance Standards.
  • Assessment process in “Designated Countries” is an acceptable substitute for the IFC Performance Standards
  • Currently the ‘Designated Countries” list refers to High-Income OECD Country list, however the list is being reviewed to verify whether it is appropriate.
  • It is expected that the 'Designated Countries' list will not be significantly different from the current High-Income OECD Country list.
Glossary of Terms
  • Not applicable.
  • Inclusion of a Glossary of Terms which includes detailed definitions of Environmental and Social Impact Assessment (ESIA), Environmental and Social Management plan (ESMP), and Environmental and Social Management System (ESMS).
Implementation Notes
  • For Loan Documentation.
  • For Loan Documentation.
  • Under development - Implementation Notes for Climate Change and Reporting requirements, and question and answers on Scope.

EQUATOR PRINCIPLES II - 2006

EP II can be applied to transactions where the mandate was signed prior to 1 January 2014.

Related Content:

The Equator Principles III - 2013

The Equator Principles (EP) III is effective from 4 June 2013.

TRANSLATIONS

EP III is now available for download in the following languages:

Please note that these translations were carefully prepared to ensure the accuracy and integrity of the content, however, the EP Association does not accept any responsibility for omissions or discrepancies, and cannot guarantee that users will interpret the content as originally intended. The official version of EP III is published in English and users should refer to it should they have any doubts in their understanding.

TRANSITION PERIOD

The transition period for EP III ended on 31 December 2013 and EP III is mandatory for all new transactions (where the mandate is signed after 31 December 2013) from 1 January 2014. EP III does not apply retroactively therefore EP Association Members are not expected to switch from EP II to EP III for transactions where the mandate was signed before 1 January 2014.

The EP Association Steering Committee accepts that in certain situations there might be legal constraints that prevent EP Association Members applying EP III from 1 January 2014, however each member should make all necessary efforts to ensure EP III is incorporated into their institution's review of transactions according to their own risk management frameworks and engagement with clients from this date.

OVERVIEW OF KEY CHANGES - EP II TO EP III

Changes Reflecting Priorities and Recommendations from the EP Strategic Review
TOPIC EP II EP III
Scope
  • Project Finance
  • Project Finance Advisory
  • Project Finance
  • Project Finance Advisory
  • Project-Related-Corporate Loans
  • Bridge Loans
EP Association Member Public Reporting

High level reporting:

  • Number of “Transactions Screened and Closed” and categorisation.
  • Info on implementation process.

Minimum requirements:

  • Number of “Projects Closed”  including: categorisation, sector, region and whether an independent review has taken place.
  • Project Names for Project Finance deals (subject to client consent).
  • Info on EP implementation process including roles and responsibilities, staffing, policies and procedures.
  • Details on training mandatory for first year of EP adoption.
Client Public Reporting
  • Not applicable.
  • Online summary of Environmental and Social Impact Assessment.
  • Greenhouse Gas (GHG) emission levels for projects emitting over 100,000  tones of CO2 annually during operational phase.
Changes to Align with the Updated IFC performance Standards
TOPIC EP II EP III
Social
  • Social risks due diligence.
  • “Free Prior Informed Consultation”.
  • Social and relevant human rights due diligence.
  • “Free Prior Informed Consent” in specific circumstances.
  • Explicit reference to address human rights in the Preamble.
  • Reference to “Guiding Principles on Business and Human Rights, Implementing the UN Protect, Respect and Remedy Framework”.
Climate
  • As part of World Bank Group Environmental, Health and Safety (EHS) guidelines and general due diligence.
  • Attention in due diligence.
  • Alternative analysis for high emitting projects in line with Performance Standard 3.
  • Explicit reference to address climate change in the Preamble.
  • Project reporting requirements on GHG emission levels:
    • Mandatory: projects emitting + 100K tonnes of CO2.
    • Encouragement: projects emitting + 25K tonnes of CO2.
Language Alignment
  • Environmental and social risks.
  • Environmental and social risks and impacts.
Changes to Address Consistency and Support EP Implementation
TOPIC EP II EP III
Information Sharing
  • Not applicable however though carried out on an informal basis.
  • Formalised approach for EP Association Members to share information related to environmental and social matters with other mandated financial institutions .
Country Designation
  • Assessment process in High-Income OECD Countries is an acceptable substitute for the IFC Performance Standards.
  • Assessment process in “Designated Countries” is an acceptable substitute for the IFC Performance Standards
  • Currently the ‘Designated Countries” list refers to High-Income OECD Country list, however the list is being reviewed to verify whether it is appropriate.
  • It is expected that the 'Designated Countries' list will not be significantly different from the current High-Income OECD Country list.
Glossary of Terms
  • Not applicable.
  • Inclusion of a Glossary of Terms which includes detailed definitions of Environmental and Social Impact Assessment (ESIA), Environmental and Social Management plan (ESMP), and Environmental and Social Management System (ESMS).
Implementation Notes
  • For Loan Documentation.
  • For Loan Documentation.
  • Under development - Implementation Notes for Climate Change and Reporting requirements, and question and answers on Scope.

EQUATOR PRINCIPLES II - 2006

EP II can be applied to transactions where the mandate was signed prior to 1 January 2014.

Related Content:

The Equator Principles III - 2013

The Equator Principles (EP) III is effective from 4 June 2013.

TRANSLATIONS

EP III is now available for download in the following languages:

Please note that these translations were carefully prepared to ensure the accuracy and integrity of the content, however, the EP Association does not accept any responsibility for omissions or discrepancies, and cannot guarantee that users will interpret the content as originally intended. The official version of EP III is published in English and users should refer to it should they have any doubts in their understanding.

TRANSITION PERIOD

The transition period for EP III ended on 31 December 2013 and EP III is mandatory for all new transactions (where the mandate is signed after 31 December 2013) from 1 January 2014. EP III does not apply retroactively therefore EP Association Members are not expected to switch from EP II to EP III for transactions where the mandate was signed before 1 January 2014.

The EP Association Steering Committee accepts that in certain situations there might be legal constraints that prevent EP Association Members applying EP III from 1 January 2014, however each member should make all necessary efforts to ensure EP III is incorporated into their institution's review of transactions according to their own risk management frameworks and engagement with clients from this date.

OVERVIEW OF KEY CHANGES - EP II TO EP III

Changes Reflecting Priorities and Recommendations from the EP Strategic Review
TOPIC EP II EP III
Scope
  • Project Finance
  • Project Finance Advisory
  • Project Finance
  • Project Finance Advisory
  • Project-Related-Corporate Loans
  • Bridge Loans
EP Association Member Public Reporting

High level reporting:

  • Number of “Transactions Screened and Closed” and categorisation.
  • Info on implementation process.

Minimum requirements:

  • Number of “Projects Closed”  including: categorisation, sector, region and whether an independent review has taken place.
  • Project Names for Project Finance deals (subject to client consent).
  • Info on EP implementation process including roles and responsibilities, staffing, policies and procedures.
  • Details on training mandatory for first year of EP adoption.
Client Public Reporting
  • Not applicable.
  • Online summary of Environmental and Social Impact Assessment.
  • Greenhouse Gas (GHG) emission levels for projects emitting over 100,000  tones of CO2 annually during operational phase.
Changes to Align with the Updated IFC performance Standards
TOPIC EP II EP III
Social
  • Social risks due diligence.
  • “Free Prior Informed Consultation”.
  • Social and relevant human rights due diligence.
  • “Free Prior Informed Consent” in specific circumstances.
  • Explicit reference to address human rights in the Preamble.
  • Reference to “Guiding Principles on Business and Human Rights, Implementing the UN Protect, Respect and Remedy Framework”.
Climate
  • As part of World Bank Group Environmental, Health and Safety (EHS) guidelines and general due diligence.
  • Attention in due diligence.
  • Alternative analysis for high emitting projects in line with Performance Standard 3.
  • Explicit reference to address climate change in the Preamble.
  • Project reporting requirements on GHG emission levels:
    • Mandatory: projects emitting + 100K tonnes of CO2.
    • Encouragement: projects emitting + 25K tonnes of CO2.
Language Alignment
  • Environmental and social risks.
  • Environmental and social risks and impacts.
Changes to Address Consistency and Support EP Implementation
TOPIC EP II EP III
Information Sharing
  • Not applicable however though carried out on an informal basis.
  • Formalised approach for EP Association Members to share information related to environmental and social matters with other mandated financial institutions .
Country Designation
  • Assessment process in High-Income OECD Countries is an acceptable substitute for the IFC Performance Standards.
  • Assessment process in “Designated Countries” is an acceptable substitute for the IFC Performance Standards
  • Currently the ‘Designated Countries” list refers to High-Income OECD Country list, however the list is being reviewed to verify whether it is appropriate.
  • It is expected that the 'Designated Countries' list will not be significantly different from the current High-Income OECD Country list.
Glossary of Terms
  • Not applicable.
  • Inclusion of a Glossary of Terms which includes detailed definitions of Environmental and Social Impact Assessment (ESIA), Environmental and Social Management plan (ESMP), and Environmental and Social Management System (ESMS).
Implementation Notes
  • For Loan Documentation.
  • For Loan Documentation.
  • Under development - Implementation Notes for Climate Change and Reporting requirements, and question and answers on Scope.

EQUATOR PRINCIPLES II - 2006

EP II can be applied to transactions where the mandate was signed prior to 1 January 2014.

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