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Equator Principles
The Equator Principles is a risk management framework adopted by financial institutions, for determining, assessing and managing environmental and social risk in project finance. It is primarily intended to provide a minimum standard for due diligence to support responsible risk decision-making. As of March 2021, 116 financial institutions in 37 countries have officially adopted the Equator Principles, covering the majority of international project finance debt in emerging and developed markets. The Equator Principles, formally launched in Washington, D.C., on June 4, 2003, were based on existing environmental and social policy frameworks established by the International Finance Corporation.
The standards have subsequently been periodically updated into what is commonly known as the International Finance Corporation Performance Standards on social and environmental sustainability and on the World Bank Group Environmental, Health, and Safety Guidelines. The Equator Principles have recently been revised and the third iteration of the Equator Principles Archived 2013-06-21 at the Wayback Machine was launched on June 4, 2013. The reviewed fourth iteration of the Equator Principles [1] were published in July 2020.
The Equator Principles apply globally, to all industry sectors and (within EPIII) to four financial products:
1) Project Finance Advisory Services
2) Project Finance
3) Project-Related Corporate Loans and
4) Bridge Loans.
The relevant thresholds and criteria for application are described in detail in the Scope section of the Equator Principles. Equator Principles Financial Institutions (EPFIs) commit to implementing the EP in their internal environmental and social policies, procedures and standards for financing projects and will not provide Project Finance or Project-Related Corporate Loans to projects where the client will not, or is unable to, comply with the Equator Principles. While the Equator Principles are not intended to be applied retroactively, EPFIs apply them to the expansion or upgrade of an existing project where changes in scale or scope may create significant environmental and social risks and impacts or significantly change the nature or degree of an existing impact.
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Equator Principles
The Equator Principles is a risk management framework adopted by financial institutions, for determining, assessing and managing environmental and social risk in project finance. It is primarily intended to provide a minimum standard for due diligence to support responsible risk decision-making. As of March 2021, 116 financial institutions in 37 countries have officially adopted the Equator Principles, covering the majority of international project finance debt in emerging and developed markets. The Equator Principles, formally launched in Washington, D.C., on June 4, 2003, were based on existing environmental and social policy frameworks established by the International Finance Corporation.
The standards have subsequently been periodically updated into what is commonly known as the International Finance Corporation Performance Standards on social and environmental sustainability and on the World Bank Group Environmental, Health, and Safety Guidelines. The Equator Principles have recently been revised and the third iteration of the Equator Principles Archived 2013-06-21 at the Wayback Machine was launched on June 4, 2013. The reviewed fourth iteration of the Equator Principles [1] were published in July 2020.
The Equator Principles apply globally, to all industry sectors and (within EPIII) to four financial products:
1) Project Finance Advisory Services
2) Project Finance
3) Project-Related Corporate Loans and
4) Bridge Loans.
The relevant thresholds and criteria for application are described in detail in the Scope section of the Equator Principles. Equator Principles Financial Institutions (EPFIs) commit to implementing the EP in their internal environmental and social policies, procedures and standards for financing projects and will not provide Project Finance or Project-Related Corporate Loans to projects where the client will not, or is unable to, comply with the Equator Principles. While the Equator Principles are not intended to be applied retroactively, EPFIs apply them to the expansion or upgrade of an existing project where changes in scale or scope may create significant environmental and social risks and impacts or significantly change the nature or degree of an existing impact.