Will the Equator Principles soon apply to corporate loans?

16 July 2011 - Norton Rose

The Equator Principles are a set of principles designed to ensure that projects are developed in a socially and environmentally responsible way. Financial institutions can voluntarily agree to adhere to the Equator Principles, and by doing so, agree to apply them to all new project financings with total project capital costs of US $10 million or more. Each financial institution which signs up to the Equator Principles (an EPFI) agrees to report publicly each year on its implementation and experience. Each EPFI interprets and implements the Equator Principles differently, which has led to inconsistent application. As a result, the scope of the Equator Principles may be widened. At present, there is no official sanction for non-compliance with the Equator Principles (other than public de-listing as an EPFI for failure to report annually or non-payment of annual fees). However, if an EPFI invests in projects which are not perceived to be environmentally or socially sound, it can risk significant damage to its reputation. Read More.