In june 20, the third version of eps ep iii was released, which expanded the scope of eps to include projectrelated corporate loans. The equator principles association epa has published a finalised version of equator principles iv epiv following consultation. It is primarily intended to provide a minimum standard for due diligence and monitoring to. This chapter will focus on an overall assessment of implementation of the equator principles eps based on survey research from participating banksequator principle financial institutions epfis. They are aimed at measuring the social and environmental impact of new capital projects. Abn amro applies the equator principles to all project finance and project advisory services and welcomes the changes made to them in 20 see also equatorprinciples. The goal of the equator principles is for financial institutions to have oversight and input in the projects they finance to ensure that they are developed in a socially and. A total of 15 new project finance deals in emerging markets were. The equator principles ep can be defined as a voluntary risk management framework with the purpose of determining, assessing, and managing environmental and social risk in international project.
To implement the equator principles, the bank drafted its own. Equator principles association is the unincorporated association of member epfis whose object is the management, administration and development of the equator principles. The eps ensure socially and environmentally responsible financing of large scale infrastructure, mining and energy projects through a set of standards developed by the international finance corporation ifc and a. In 20, eps were updated epiii to include projectrelated climate change issues in. Equator principles in intesa sanpaolo the principles apply, globally and to all industry sectors, to four financial products. Andrew lee nguyen graduate school of international relations and pacific studies university of california, san diego prepared for professor peter gourevitch edited by jennifer cheng, mpia 2008 corporate social responsibility. Epiv broadens the scope of the equator principles eps to cover a wider range of loans, including project refinancing and acquisition financing, as well as. Unep inquirycigi research convening 4 the equator principles abstract the equator principles eps are a voluntary code of conduct and a risk management framework for determining, assessing and managing environmental and social risks in projects, such as energy or infrastructure projects. The equator principles are a transnational corporate social responsibility initiative in the project finance sector. Institutions that use these principles are known under the acronym of epfi equator principles financial institutions. This paper analyses the compliance of the 79 equator principles financial institutions epfi with the seven mandatory requirements.
The ep are adopted and applied voluntarily by whats known as equator principles financial institutions, or epfis. This is the second blog in a series on the equator principles iii. Pdf on feb 1, 2005, franck amalric and others published the equator principles. The equator principles eps is a risk management framework, adopted by financial institutions, for determining, assessing and managing environmental and social risk in projects and is primarily intended to provide a minimum standard for due diligence and monitoring to support responsible risk decisionmaking. The equator principles ep are a voluntary code of conduct for assessing, managing and reporting environmental and social impacts in project finance. An update of the equator principles ep iii was adopted in 20. In 2018, a total of 20 loans subject to screening according to the equator principles reached financial close a total of 346 since 2007. In addition, while the principles are not intended to be applied retroactively, we will apply them to all project financings covering expansion or upgrade. Why does abn amro have an equator principles policy. The equator principles have recently been revised and the third iteration of the equator principles was launched on 4 june 20. It is primarily intended to provide a minimum standard for due diligence and monitoring to support responsible risk decisionmaking.
We actively participated in discussions about their implementation as a member financial institution of the association of equator principles. Any information and documents relevant to the know your client process are available via the swift kyc registry, of which bnp paribas is an active user and contributor. Equator principles report 20 ep ii the banco republica adhered to the equator principles in 2008, thus becoming one of the first banks in doing so in latin america and the pioneer in uruguay being still the only one in this country. The equator principles apply the four financial products described belowto when supporting a new. Expansion of the scope as per equator principles, june 20 formerly only project finance and project finance advisory services were under the equator principles eps scope. The equator principles june 20 japanese translation pdf 556kb the equator principles association official website environmental and social policies and guidelines with which the equator principles comply. The equator principles apply globally and to all industry sectors. The main objective is to achieve a more indepth collaboration with other equator banks resulting in more efficient and effective application of environmental and social criteria in all financing transactions that fmo concludes.
Equator principles and esra in lending and investment practices in firstrand, the application of the equator principles ep forms part of the esra programme, and is a very specific credit risk management framework for purposes of determining, assessing and managing environmental and social risk in project finance transactions. Unep inquirycigi research convening 7 the equator principles 2 the equator principles as an example of a private code of conduct for a long time and without exception, public regulatory bodies issued regulations. Our banks adoption of the equator principles ep dates back to 2006, even before the merger of banca intesa and sanpaolo imi, that gave rise to intesa sanpaolo. The banks adopting and subsequently implementing the principles equator principles financial institutions epfis are equipped with organisational structures and tools to identify, assess and manage social and environmental risk associated with the projects under consideration for financing. Membership was later reconfirmed in 2007 by the new group and the implementation process is defined and regulated by the rules governing the equator principles, which are valid for the entire group. A financial industry benchmark for determining, assessing and managing environmental and social risk in projects. As a result, following the entry into force of the new equator principles in 20, the legislative corpus has been updated and a new operational guide was published in 2014. Financial institutions epfis, voluntarily developed the equator principles eps as a risk management framework for determining, assessing and managing environmental and social risk in projects epswebsite. An empirical study of their effect on the financial performance of banks thesis pdf available february 2016 with 1,316 reads how we measure reads. The equator principles financial institutions epfis have consequently adopted these principles in order to ensure that the projects we finance are developed in a manner that is socially responsible and reflect sound environmental management practices. The equator principles, launched in 2003, were updated in 2006 and then in june 20. This paper shows that as of november 20, epfis have increased from the original 10 founding members to 78 members, which. Assignment for uq mine7063 sustainable development in the minerals industry advanc.
The information disclosure regarding the implementation of the principles includes all projects that completed. Here is it possible to see the division of projects by category and area and see examples of them. Ep signatories choose to voluntarily adopt and primarily apply the ep as part of their due diligence processes to support responsible risk decisionmaking. A read is counted each time someone views a publication summary such as the title, abstract, and list of authors, clicks on a figure, or views or downloads the fulltext. Glossary for the equator principles mizuho financial group. One year on from the release of the latest edition of the equator principles ep iii in 20, it is clear from the literature that there is a lack of understanding or any general consensus amongst academics, practitioners and critics as to whether the equator principles ep are. Equator principles eps are a set of voluntary guidelines adopted by private financial institutions to ensure that large scale development or construction projects appropriately consider the associated potential impacts on the natural environment and the affected communities. The equator principles once again constituted a binding condition for the approval of all project finance supplied by abn amro in 2012.
Are the equator principles greenwash or game changers. Pdf the equator principles, project finance and the. A management framework for determining, assessing, and managing environmental, social, and financial risk in large infrastructure and industrial projects. Project finance advisory services, project finance, projectrelated corporate loans and bridge loans, as well as financings covering expansion or upgrade of an existing facility, whenever changes in scale or scope may. Furthermore, the frequently used term asset does not refer to the financial product asset finance, which is excluded from the scope of the equator principles. Requirements exclusive to common approaches and equator principles are coloured blue or green respectively. The action plan defined as equator principles action plan in exhibit i of the equator principles june 20 is prepared, as a result of the epfis due diligence process, to describe and prioritize the actions needed to address any gaps in the assessment documentation, esmps, the esms, or stakeholder engagement process documentation to bring the project in line with applicable standards as. Environmental and social management system and equator. Human resources development on sustainability an our ecoefficient activities 18 a. In 20, the equator principles association celebrated the tenth anniversary of. These guidelines are based on the equator principles revised in june 20. The equator principles is a risk management framework, adopted by financial institutions.
Esg is therefore at the heart of our company and strategy. Tds equator principles reporting the equator principles ep is a risk management framework for determining, assessing and managing environmental and social risk in projects. The principles were established in june 2003 and went through revisions twice in june 2006 and june 20. The third, revised edition of the equator principles, ep iii, went into effect on june 4 th 20. As of july 2019, 96 equator principles financial institutions epfis from 37 countries have adopted the equator principles. Internal regulations are constantly updated when internal or external events make it necessary. The third revision ep iii of the equator principles eps will be launched on june 4, 20, and it will affect applicable transactions signed on or after january 1, 2014. The goal of the equator principles is for financial institutions to have oversight and input in the projects they finance to ensure that they are developed in a socially and environmentally responsible manner. View equator principles research papers on academia. The revised equator principles2 came into force on january 1st, 2014. The equator principles association secretariat manages the day to day running of the equator principles association including the collation of epfis project name reporting data. Implementation guidelines for the equator principles. Ten teenage years of implementation and a search for outcome olaf weber and emmanuel acheta 5 of an adolescent still seeking to establish relevance in an atmosphere of flux and uncertainty.
The equator principles ep are a framework used by financial institutions to determine, assess and manage environmental and social risk in projects. Implementation report for the year 2016 january 1st to december 31st pursuant to principle 10 of the. The equator principles ep can be defined as a voluntary risk management framework with the purpose of determining, assessing, and managing environmental and social risk in. The equator principles and related documents englishjapanese. The equator principles, launched in 2003 and revamped in 2006, are a set of voluntary principles designed to help private lenders make socially and environmentally responsible project financing. Fmo recognizes that integrating environmental, social and governance esg returns into our clients projects is critical to their longterm financial success. The equator principles financial institutions epfis have consequently adopted these principles in order to ensure that the projects we finance are developed in a. In 20, the equator principles association celebrated the tenth anniversary of its principles and at the same time the formal launch of the latest generation of the equator principles ep iii. Investigating compliancenon compliance with the equator principles to comply of not to complythat is the question by. Btmu started applying the june 20 revision in january 2014.
Pdf the equator principles are a transnational corporate social responsibility initiative in the project finance sector. Reporting on equator principles implementation for the. Reporting on equator principles implementation for the year 20. The traditional position was that the nationstate commands the means and capability to supervise business activities. The equator principles eps public private partnership. I abstract one year on from the release of the latest edition of the equator principles ep iii in 20, it is clear from the literature that there is a lack of understanding or any general consensus. To implement the equator principles, the bank drafted its own policy that fosters abn amro.
Investigating compliancenon compliance with the equator. The equator principles environmental and social risk. Equator principles reporting criteria august 2017 the equator principles the principles are a global framework adopted by financial institutions to assess, monitor and report environmental and social risk in project finance, project financerelated corporate loan investments and bridge loans. The equator principles eps is a risk management framework, adopted by financial institutions, for determining, assessing and managing environmental and social risk in projects. Abn amro is one of the founding members of the equator principles, and has adhered to the principles since their inception in 2003. Description of the implementation of ep in the credit and risk area d.
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