Equator Principles

<h2 id="members-and-reporting">Members and reporting</h2>
As of April 2017, 89 financial institutions<a class="footnote-ref" id="fnref:3" href="#fn:3">3</a> in <a href="/facts/Build_Back_Better_World/IoqjCnVz">37 countries</a> have officially adopted the Equator Principles.

<h2 id="the-principles">The principles</h2>
Principle 1: Review and Categorisation
Principle 2: Environmental and Social Assessment
Principle 3: Applicable Environmental and Social Standards
Principle 4: Environmental and Social Management System and Equator Principles Action Plan
Principle 5: Stakeholder Engagement
Principle 6: Grievance Mechanism
Principle 7: Independent Review
Principle 8: Covenants
Principle 9: Independent Monitoring and Reporting
Principle 10: Reporting and Transparency

<h2 id="criticism">Criticism</h2>
NGOs have generally welcomed the Principles, but some have expressed criticism over their integrity.
A common criticism is that the Principles will not make a real difference. This criticism argues the case of the <a href="/facts/Baku-Tbilisi-Ceyhan_pipeline/kM367zsS">Baku-Tbilisi-Ceyhan pipeline</a>, which, in 2004, was financed by eight Equator Principles' banks and the IFC despite an NGO assessment that found 127 alleged breaches. The banks and IFC said they were confident that the Equator Principles were followed, and said an independent consultant had confirmed this assessment.<a class="footnote-ref" id="fnref:4" href="#fn:4">4</a><a class="footnote-ref" id="fnref:5" href="#fn:5">5</a><a class="footnote-ref" id="fnref:6" href="#fn:6">6</a>
Another criticism was that the banks might <a href="/facts/Lobbying/lzdxSAUj">lobby</a> the IFC to weaken its standards on which the Principles are based. The banks point out that IFC revised and strengthened its policies in 2006 and that the banks correspondingly strengthened the Equator Principles in the same year. Other criticisms include alleged lack of enforcement and accountability, <a href="/facts/Free_rider_problem/bXVYJGka">free-riders</a>, and that the scope of the principles is limited to project finance only. Several banks have sought to address these concerns by publishing summaries of their Equator Principles screening, including the number of projects they turned down for noncompliance.
In 2005 some NGOs said that one of the adopting banks, ABN AMRO (before it was split up in 2010), was the most climate-unfriendly bank in the <a href="/facts/Netherlands/y8xn5stT">Netherlands</a>, with estimated annual indirect CO2 emissions of almost 250 million tonnes in 2005 from industries to which it provides financial services. NGOs said this was just over the annual CO2-emissions of the Netherlands and almost 1% of the total annual worldwide CO2 emissions at the time. ABN AMRO defended its environmental record and announced steps to reduce its direct emissions, but some NGOs say it is the indirect emissions through their clients that make global banks such important targets in climate change.
Following the <a href="/facts/Dakota_Access_Pipeline_protests/GVFyzyy4">Dakota Access Pipeline protests</a>, investors learned that 13 of the 17 banks that financed the <a href="/facts/Dakota_Access_Pipeline/RKIhjEuA">Dakota Access Pipeline</a> were signatories to the Equator Principles. Despite concerns being raised that the project could threaten the water supply from <a href="/facts/Lake_Oahe/0lAqzfqj">Lake Oahe</a> and the <a href="/facts/Missouri_River/NL8Sj9Wb">Missouri River</a> if a leak occurred, project financing was still approved.<a class="footnote-ref" id="fnref:7" href="#fn:7">7</a><a class="footnote-ref" id="fnref:8" href="#fn:8">8</a><a class="footnote-ref" id="fnref:9" href="#fn:9">9</a>

<h2 id="see-also">See also</h2>
<ul><li><a href="/facts/Corporate_social_responsibility/lIoo9m1s">Corporate social responsibility</a></li>
<li><a href="/facts/Cross-sector_biodiversity_initiative/VpC0As9P">Cross-sector biodiversity initiative</a></li>
<li><a href="/facts/Environmental%2c_social_and_corporate_governance/hCR8skud">Environmental, social and corporate governance (ESG)</a></li>
<li><a href="/facts/Ethical_banking/VSycLJl8">Ethical banking</a></li>
<li><a href="/facts/Ethical_investing/pW8Ftn39">Ethical investing</a></li>
<li><a href="/facts/Socially_responsible_investing/pW8Ftn39">Socially responsible investing</a></li>
<li><a href="/facts/Special_purpose_entity/3q4HJJbS">Special purpose entity</a></li></ul>

<h2 id="external-links">External links</h2>
<ul><li><a href="https://equator-principles.com/">Official website of the Equator Principles</a>.</li>
<li><a href="https://web.archive.org/web/20070928062339/http://www.equator-principles.com/btc.shtml">BTC Project is the First Major Test of the Equator Principles</a> Equator Principles website discussion of the BTC project criticism.</li>
<li><a href="https://web.archive.org/web/20070926235851/http://www.abnamro.com/com/about/data/abnamro_btcpipeline.pdf">ABN AMRO report on its application of the Equator Principles to the BTC pipeline project.</a></li>
<li><a href="https://web.archive.org/web/20071007140526/http://www.ifc.org/ifcext/btc.nsf/Content/IFCResponsetoESIAPublicComments">IFC BTC Oil Pipeline Project - IFC Response to ESIA Public Comments</a> IFC rebuttal of NGO criticism of its environmental and social assessment of the BTC pipeline project.</li>
<li><a href="https://web.archive.org/web/20141030053334/http://viewer.zmags.com/showmag.php?mid=drddw#/page6/">Z | ADMIN</a> The Equator Principles and IFC Performance Standards in Mining.</li>
<li><a href="https://web.archive.org/web/20141030073500/http://a4id.org/sites/default/files/user/Equator%20Principles.pdf">A Legal Guide - The Equator Principles</a></li>
<li><a href="http://equator-principles.com/ep4/">Review of the Equator Principles – Towards EP4</a></li></ul>

<h2 id="references">References</h2>

<ol>
<li id="fn:1">Wright, Christopher, and Alexis Rwabizambuga. "Institutional pressures, corporate reputation, and voluntary codes of conduct: An examination of the equator principles." Business and Society Review 111.1 (2006): 89-117. <a href="#fnref:1" class="footnote-back-ref">↩</a></li>
<li id="fn:2">"Equator Principles History and Context FAQ" (PDF). www.equator-principles.com. Archived from the original (PDF) on 23 November 2015. Retrieved 30 November 2015. <a href="https://web.archive.org/web/20151123034432/http://equator-principles.com/resources/Frequently%20Asked%20Questions.pdf" target="_blank">https://web.archive.org/web/20151123034432/http://equator-principles.com/resources/Frequently%20Asked%20Questions.pdf</a> <a href="#fnref:2" class="footnote-back-ref">↩</a></li>
<li id="fn:3">"Members & Reporting". Equator Principles Association. Retrieved 21 April 2023. <a href="https://equator-principles.com/members-reporting/" target="_blank">https://equator-principles.com/members-reporting/</a> <a href="#fnref:3" class="footnote-back-ref">↩</a></li>
<li id="fn:4">"BTC Project is the First Major Test of the Equator Principles". Archived from the original on 28 September 2007. Retrieved 21 April 2023. <a href="https://web.archive.org/web/20070928062339/http://www.equator-principles.com/btc.shtml" target="_blank">https://web.archive.org/web/20070928062339/http://www.equator-principles.com/btc.shtml</a> <a href="#fnref:4" class="footnote-back-ref">↩</a></li>
<li id="fn:5">"Archived copy" (PDF). Archived from the original (PDF) on 2007-09-26. Retrieved 2007-05-26.{{cite web}}: CS1 maint: archived copy as title (link) <a href="https://web.archive.org/web/20070926235851/http://www.abnamro.com/com/about/data/abnamro_btcpipeline.pdf" target="_blank">https://web.archive.org/web/20070926235851/http://www.abnamro.com/com/about/data/abnamro_btcpipeline.pdf</a> <a href="#fnref:5" class="footnote-back-ref">↩</a></li>
<li id="fn:6">"IFC BTC Oil Pipeline Project - Multistakeholder Forum Meetings Report". Archived from the original on 2012-11-27. Retrieved 2014-01-07. <a href="https://web.archive.org/web/20121127115728/http://www.ifc.org/ifcext/btc.nsf/Content/MultistakeholderForumMeetingsReport" target="_blank">https://web.archive.org/web/20121127115728/http://www.ifc.org/ifcext/btc.nsf/Content/MultistakeholderForumMeetingsReport</a> <a href="#fnref:6" class="footnote-back-ref">↩</a></li>
<li id="fn:7">"Why banks need to plug gaps in the Equator Principles to prevent community conflict | Reuters Events | Sustainable Business". <a href="http://www.ethicalcorp.com/why-banks-need-plug-gaps-equator-principles-prevent-community-conflict" target="_blank">http://www.ethicalcorp.com/why-banks-need-plug-gaps-equator-principles-prevent-community-conflict</a> <a href="#fnref:7" class="footnote-back-ref">↩</a></li>
<li id="fn:8">"Webinar: Equator Principles IV: A Human Rights Perspective". 23 July 2019. <a href="https://investorsforhumanrights.org/events/webinar-equator-principles-iv-human-rights-perspective" target="_blank">https://investorsforhumanrights.org/events/webinar-equator-principles-iv-human-rights-perspective</a> <a href="#fnref:8" class="footnote-back-ref">↩</a></li>
<li id="fn:9">"Front page". investorsforhumanrights.org. Retrieved 2023-02-21. <a href="https://einvestment.com/" target="_blank">https://einvestment.com/</a> <a href="#fnref:9" class="footnote-back-ref">↩</a></li>
</ol>

Equator Principles open-in-new

Equator Principles