Updated Equator Principles released for public comment
The Equator Principles (EP) Association has released the draft of the updated Equator Principles (EP III) for stakeholder consultation and public comment.
The EP is a risk framework for identifying, assessing, and managing environmental and social risks in Project Finance transactions and has been adopted by 77 financial institutions worldwide.
Key themes and areas of development proposed in the EP III draft include:
- An extension in the scope of the EP to Project-Related Corporate Loans and Bridge Loans.
- Changes reflecting the recent update of the International Finance Corporation (IFC) Performance Standards.
- New requirements related to managing impacts on climate.
- Greater emphasis on human rights considerations in due diligence and an acknowledgment of the UN 'Protect, Respect and Remedy' Framework for Business and Human Rights and Guiding Principles on Business and Human Rights.
- A strengthening of reporting and transparency requirements.
Leonie Schreve, Director, Head of Environmental and Social Risk at ING and Chair of the EP Association Steering Committee said 'I am proud that we are releasing the proposed draft of the EP III today. We were able to reflect on the implementation experience of our diverse range of EP Association members and consider stakeholder input to date.'
The release of the EP III draft follows extensive and ongoing consultation with EP Association members, and proposed changes aim to reflect the diverse range of member policies, practices, cultural settings, client relationships, risk appetites, and legal boundaries.
The EP III draft also aims to reflect stakeholder input received to date, key issues highlighted in the recent EP Association Strategic Review and the recent changes to the IFC Performance Standards, which underpin the EP.
The formal stakeholder consultation and public comment period will continue for a minimum of 60 days giving all interested parties and stakeholders (including EP Association members, other financial institutions, clients, industry bodies and associations, non-governmental organisations, consultants, law firms and regulatory bodies) an opportunity to review the EP III draft and provide comments.
The EP III draft, a frequently asked questions document and details on the stakeholder engagement and public comment process can be found on the EP website at http://www.equator-principles.com/index.php/EP3.