Equator Principles 4 Released
Targeted Update Brings Noncompliance Accountability to Industry Guidelines on Human Rights and Climate ImpactMay 21, 2019 | EP Secretariat | EP Association News
EP ASSOCIATION -- Following four phases of intensive stakeholder engagement, the Equator Principles Association is pleased to share the fourth iteration of the Equator Principles (EP4) with members, external stakeholders, and other interested parties.
The Equator Principles (EPs) are a global framework to support risk decision-making on environmental and social issues when financing projects in sensitive sectors or geographies. EP Financial Institutions (EPFIs) are voluntary members that establish systems to ensure clients implement projects in consideration with the environment and society. Membership of the EPs is a first-order recognition of an institution's intent to finance projects where communities and the environment are held as the highest priority.
EP4 brings significant advancements and reinforcements to the EPs. Most substantial is the development of Principle 11, Noncompliance Delisting, which safeguards the integrity of membership by expelling EPFIs for repeatedly financing projects that violate the principles. This brings accountability by instituting a dedicated compliance review process with a "three strikes" system for EPFIs that fail to follow the EPs.
Since phasing in compliance review, the EP Association has ejected from membership Mizuho Financial Group, Mitsubishi UFJ Financial Group, and Sumitomo Mitsui Banking Corporation, which were found noncompliant for participation in financing the coal-fired power generation projects Nghi Son 2 and Van Phong 1 in the Republic of Vietnam and Cirebon 2 in Indonesia. Further delistings and relistings will be disclosed on a quarterly basis and published here.
The updates in EP4 bring accountability and thereby increased credibility to membership. The EP Association, Steering Committee, and Working Groups are pleased to present this updated benchmark for excellence that will ensure the EPs remain relevant and meaningful. The full text of the Equator Principles 4, including a Summary of Updates, as well as other EP compliance materials, can be viewed at www.equator-principles.org/best-practice-resources.