Equator Principles

The Equator Principles13 (EPs) are a voluntary set of standards for private sector banks to use when determining, assessing and managing social and environmental risk in project financing.14 The Equator Principles are modelled after the standards of the World Bank and the social policies of the International Finance Corporation (IFC).

Equator Principles Financial Institutions (EPFIs) commit only providing loans to projects where the borrower is able to comply with social and environmental policies and procedures underpinning the principles. The Principles apply globally and across all industry sectors. The Equator Principles apply to project financings 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.

As of June 4, 2013, 79 financial institutions in 35 countries have adopted the Equator Principles.15 In June 2013, the Equator Principles were revised in a third iteration [Equator Principles III]—effective from June 4, 2013 and applied to all new transactions from January 1, 2014.