Standards

Equator Principles

Equator Principles

Governing Organization

Equator Principles

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Assessment Type

Self assessment

Sectors Covered

Finance

Issues Covered

Carbon, CSR, Environmental Management, Ethical Trade, Waste and Chemicals Management, Water Related, Worker Safety

Description

A financial industry benchmark for determining, assessing and managing social & environmental risk in project financing.  The Equator Principles (EPs) is a credit risk management framework for determining, assessing and managing environmental and social risk in Project Finance transactions. Project Finance is often used to fund the development and construction of major infrastructure and industrial projects.  The EPs are adopted by financial institutions and are applied where total project capital costs exceed US$10 million. The EPs are primarily intended to provide a minimum standard for due diligence to support responsible risk decision-making.  The EPs are based on the International Finance Corporation Performance Standards on social and environmental sustainability and on the World Bank Group Environmental, Health, and Safety Guidelines (EHS Guidelines).  Equator Principles Financial Institutions (EPFIs) commit to not providing loans to projects where the borrower will not or is unable to comply with their respective social and environmental policies and procedures.  In addition, while the EPs are not intended to be applied retroactively, EPFIs apply them to all Project Finance transactions covering expansion or upgrade of an existing facility where changes in scale or scope may create significant environmental and/or social impacts, or significantly change the nature or degree of an existing impact.  The EPs have become the industry standard for environmental and social risk management and financial institutions, clients/project sponsors, other financial institutions, and even some industry bodies refer to the EPs as good practice.

Sustainability Issues

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