Equator Principles Strategic Review

The Equator Principles, the de facto environmental and social benchmark used in project finance, will undergo a strategic review. Will this help with further mainstreaming or shifting financing more radically into other directions?

Since its launch in 2003, the Equator Principles have been adopted by over 65 financial institutions from around the globe. They are effectively a derivative of the IFC Performance Standards, which is currently undergoing a review process (about which I blogged previously ).

Yesterday, the Equator Principles Association announced  the launch of a new Strategic Review process. The result of the review is designed to help the Association ensure that the Equator Principles (EPs) continue to be viewed as the de facto standard in environmental and social risk management for project finance within the financial sector.

The Equator Principles will continue to be pegged to the IFC Performance Standards. Thus, this strategic review will help harmonize the Equator Principles with the emerging/updated IFC Performance Standards. The review will also provide the Association to address specific concerns raised by critiques of the Equator Principles, which are illustrated in this example from Banktrack. The Review will commence immediately and will continue through to the first quarter of 2011. To contribute to the review process, visit the Review website.

What are your expectations from this review and what progress would you like to see?  Is there further scope for mainstreaming to cover sovereign wealth funds and equivalents and the private equity market?

About the author: Mehrdad Nazari (MBA, MSc, LEAD Fellow) is a Corporate Responsibility, Sustainability Reporting & ESIA Advisor, and Director of Prizma. He was previously an environmental consultant with Dames & Moore, Principal Environmental Specialist at the EBRD and CSR Research Director at CoreRatings. Mehrdad is a GRI-approved trainer on GRI's sustainability reporting framework and a licensed AA1000 Assurance Provider.

4 Comments to Equator Principles Strategic Review

  1. Glad to see this happening. Wow, can’t believe the EPs are 7 years old already. I hope that part of this process focuses on impact and not just tweaking the indicators and the governance rules.

  2. […] I blogged earlier, the recently formed Equator Principles Association  commissioned a strategic review of the […]

  3. […] the basis for the Equator Principles (which is also undergoing a review process I blogged about earlier) used by project finance banks and Export Credit Agencies (ECAs, such as Export Development Canada […]

  4. […] derivative of the IFC Performance Standards, are also undergoing a revision process I blogged about earlier. This is designed to facilitate harmonization of the Equator Principles with the updated IFC […]

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