On May 8th sixty of the world’s leading financial institutions marked the fifth anniversary of the Equator Principles (EPs), voluntary standards for financial institutions to manage environmental and social risk in their project finance transactions.
The EPs have become the global standard for project finance and have transformed the funding of major projects globally. In 2007, of the US$74.6 billion total debt tracked in emerging markets, US$52.9 billion was subject to the EPs, representing about 71 per cent of total project finance debt in emerging market economies, according to Infrastructure Journal.
The EPs are now considered the financial industry ‘gold standard’ for sustainable project finance. The Principles were revised in June 2006 to reflect current implementation experience including introduction of a public reporting requirement, as well as changes made by the International Finance Corporation (IFC) to its environmental and social standards. They continue to evolve as more sophisticated funding is undertaken.
An Outreach Committee has been formed and is actively engaged with banks in China, Russia, India and other key emerging markets. Stakeholder engagement remains an important element of the EP’s implementation and the group regularly meets to share experiences with various stakeholders.