Human Rights: The Next Frontier

15 April 2014 - MIT Sloan Management Review - Olivier Jaeggi

The Guiding Principles have already influenced many standards and guidelines relevant to businesses. The most important of these include the OECD Guidelines briefly discussed above, the Renewed EU Strategy 2011-14 for Corporate Social Responsibility, including the related action plans of the EU member states, and — primarily relevant in the context of public or private infrastructure construction projects — the latest release of the Equator Principles. Read More.

Impact investing grows as asset managers recognise value

12 February 2014 - Guardian Sustainable Business, Justina Alders-Sheya

Stakeholders increasingly expect to see evidence that their money is being invested responsibly - impact investing can provide that assurance. The Equator Principles are often used as a reporting standard to ensure investments are adding real value. With a growing focus on the environment, our social footprint and the principles of ethical corporate governance, the investment process, across all of these asset classes, is evolving. The term 'impact investing' is increasingly being used to describe when asset managers proactively integrate one or more of these three elements into their investment strategy. It represents a move towards a new way of investing, with social conscience at the forefront of every deal. Read More.

The Equator Principles: Ten Teenage Years of Implementation and a Search for Outcome

30 January 2014 - CIGI Series, Olaf Weber and Emmanuel Acheta

This paper correlates these 10 years of existence to the adolescent stage of the EPs, still seeking to establish relevance. Environmental and social assessment of projects is increasing in global adoption and scope and the EPs strive to redefine these assessment practices. Critics reason, however, that without implementation efforts and enforcement, the EPs are merely window dressing and will not contribute to any change to sustainable development. The authors point out gaps in how EPFIs address the implementation of guidelines in project finance decision making, how projects implement environmental and social assessment processes in practice and whether the implementation will have a positive effect on project sustainability. The paper concludes that these gaps need further research and analysis to better understand the role of the EPs in sustainable development. Read More.

Sustainable Finance South Africa December 2013

12 December 2013 - Sustainable Finance South Africa December 2013, WWF South Africa Newsletter

A key skills set of banking is defining, pricing and managing credit risk. A company's credit risk can be affected by many factors such as market dynamics of the industry in which the company operates, environmental impacts such as water quality, and the reliability and robustness of the technology used by a company. All these sometimes interdependent factors make credit risk a complex, specialised area of expertise within a bank.

Biodiversity risk is an important area of non-financial risk that can impact credit. With this in mind, WWF-SA, in partnership with the Equator Principles Association, Forest Trends and Business and Biodiversity Offsets Programme, hosted a Banking for Biodiversity workshop in Johannesburg. Read More.

Are big banks short-selling their leverage over human rights?

31 October 2013 - The Guardian Sustainable Business, Ariel Meyerstein

Earlier this month, a handful of major European banks calling themselves the Thun Group released a "discussion paper" on how financial institutions should implement the UN Guiding Principles on Business and Human Rights. The paper is a sign that some industries are moving past fluffy CSR mantras and putting rubber to the road, for the UN principles. That's important because the guiding principles aren't legally binding – although they have catalyzed some new policies and may inform future regulation. The principles still need to be translated into more specific guidelines for different sectors before they can ultimately be useful to the global marketplace. ... In addition, most of the members of the Thun Group – which include Barclays, BBVA, Credit Suisse AG, ING Bank N.V., RBS Group, UBS AG and UniCredit – also are members of the Equator Principles Association's steering committee, so their pronouncements should be taken seriously. Read More.

The Equator Principles: Banking on Sustainability

23 August 2013 – Capital Finance International

Financial institutions worldwide are increasingly benchmarking their larger investment projects to the Equator Principles of social and environmental risk assessment. A third and more comprehensive edition of these guiding principles has now been drawn up and is being used by 79 financial institutions in 35 countries to gauge the impact of investments. Read More.

5 things energy companies should know about the Equator Principles

21 August 2013 – GreenBiz, Chris Nolan and John Hodges

Since the inception of the Equator Principles in 2003, the energy and extractives industry has been a major focus of the environmental and social risk reviews conducted by nearly 80 member banks. For example, Bank of Tokyo-Mitsubishi, a leader in project finance, put 225 projects through its Equator Principles review process between 2006 and 2012. Of these, 60 percent were in the mining, oil, gas and energy sectors. Read More.

Time to close accountability gaps in infrastructure project funding

21 August 2013 - CSR Asia Weekly, Leena Wokeck

From January 2014 financial institutions that have adopted the Equator Principles, a risk management framework for determining, assessing and managing social and environmental risks in project finance, will have to implement a new iteration of the framework. Even though action would be much needed and the revisions are relevant in Asia, the impact is sadly likely to be limited.  Of the 78 financial institutions that have committed to the Equator Principles, only five are from Asia, one each from China and India and three from Japan (Industrial Bank Co. Ltd, IDFC Limited, Bank of Tokyo-Mitsubishi UFJ, Mizuho Bank Ltd. and Sumitomo Mitsui Banking Corporation. Read More.

Voluntary bank lending principles now include consideration of climate change

19 August 2013 - Jones Day, Charles Hungerford

Effective June 4, the members of the Equator Principles Association voted to amend and strengthen the Equator Principles to include consideration of the effects of major projects on climate. The Equator Principles are voluntary standards designed to guide banks in their evaluation and management of the environmental and social risks presented by loans used to finance large projects. The Equator Principles are based on Performance Standards developed by the International Finance Corporation ("IFC"), part of the World Bank Group. The Principles provide that member banks will give loans only to covered projects that meet its 10 principles. Read More.

Banking on human rights protection for major infrastructure projects

16 August 2013 - The Guardian Blog - Jennifer Kho

The launch of the third version of the Equator Principles calls on banks to consider human rights risks, Citi's Shawn Miller tells Jennifer Kho what this means for project developers. Banks that finance infrastructure projects such as power stations, pipelines, dams and mines, have to account for a number of risks when assessing loans but human rights has been noticeably absent. Read More.