Industry specific World Bank and IFC Environmental and Health and Safety Guidelines . The Equator Principles (EP) form two sets of principles. Established in 2003, the Equator Principles (EP) are a financial industry benchmark for determining, assessing and managing environmental and social risks in projects. International Finance Corporation . The IFC sector standards in some cases do not represent best practices and even with 30 environmental staff the IFC has a poor track record of implementing its own safeguard policies. How does that multiply the impact of those standards? Performance Standard 6 of the IFC Performance Standards on Environmental and Social Sustainability (IFC Performance Standards) deals with the topic of Biodiversity Conservation and Sustainable Management of Living Natural Resources. Adoption of the Equator Principles referred to earlier in this report is voluntary, but many financial institutions use the Equator Principles as a primary tool for managing ESG risks and impacts in the project finance market. An update of one of the main frameworks used in ESG, the Equator Principles (the EPs), is scheduled to take effect on Oct. 1, 2020. 16. The EP1 were based on the IFC’s Environmental and Social Safeguard Policies and Guidelines. The Equator Principles and IFC Performance Standards as very. The Equator Principles have long been based on the performance standards and related guidelines developed by IFC. Within each of the SDG categories selected, we have chosen specific metrics that guide our efforts in these areas. As the equator principles are a risk management tool, the supporting IFC performance standards should be used where appropriate. The Equator Principles do multiply the impact of IFC Performance Standards in a num-ber of ways. • Projects located in designated countries will be separately evaluated for specific project-related risks to determine if IFC Performance Standards should be applied. The Equator Principles (hereafter referred as EP), utilises the IFC performance standards as the criteria to review and categorise projects respectively. Equator Principles: 1. Review & Categorisation 2. As a complement to the GRI Standards, SASB Standards help companies communicate effectively with investors about performance on the subset of industry-specific sustain- There is a concern that the SAMBG adds further to the burgeoning pile of standards, guidelines and best practices that mining companies are required to meet, but without necessarily adding anything new. The final text of Principle 5 requires a consultation process between the … The updated Equator Principles III have adopted the new (2012) IFC Performance Standards. 1. Financial institutions that have adopted the Equator Principles commit to implementing internal policies and processes consistent with the Equator Principles. The common terminology between the Equator Principles and the IFC Performance Standards is welcome and will contribute towards continued improvement in communication between project operators and banks. Interested in making a difference in the environmental world and advancing sustainability practices in the private and public sectors Specialties: Environmental and Social Management, Water and Groundwater, IFC Performance Standards, Ecosystem Services. Home > Environmental Regulation > Equator Principles Association Adopts Equator Principles 4. The application of biodiversity offsets results in the designation and implementation of compensation actions where impacts are unable to be mitigated fully on or off site. Standards due to the nature of the Equator Principles, it might nonetheless be useful to have an appendix in this draft that explains in greater detail how the Equator Principles and IFC Performance Standards work together and how they may apply depending on the size of … We are also using the IFC’s Performance Standards (an important element of the Equator Principles) as a reference in the development The final text of Principle 5 requires a consultation process between the client and the indigenous community. Social & Environmental Assessment 3. The changes, which take effect on 1 July 2020, include the application of the … 29 29 Common Success Factors on industry- wide guidelines guidance based on Multi-stakeholder consultation and collaboration on industry-wide guidelines Combining local E&S requirements and international good practice (e.g. tion between businesses and investors, on the financial impacts of sustainability and, specifically, on how sustain-ability issues can create or erode enterprise value. The EPs apply globally, to all industry sectors, and are focused on risk management … The Equator Principles apply globally and to all industry sectors. The IFC Performance Standards are an established and well-respected framework for ensuring sustainable development in developing countries. IFC's Performance Standards on Environmental and Social Sustainability have become globally recognized good practice in dealing with environmental and social risk management. October 2012 This … When the Equator Principles were first created, they were based on another set of well-known international sustainability standards: the International Finance Corporation, or ‘IFC’, Performance Standards. Aligning procedures and behaviours with Equator Principles, IFC Standards and Guidelines as well as Good International Industry Practices is a way to avoid, mitigate, or compensate those risks in an acceptable way for lenders, as this demonstrates better governance of environmental and social issues and is linked to better financial performance. Action Plan & Management System 5. This, she adds follows the CBN’s Sustainable Banking Principles and Sector Guideline, IFC Performance Standards and Equator Principles. At a project level, this means: For example, Performance Standard No. Current Internationally used Soft Law Standards like Equator Principles. The Equator Principles Association has published a consultation draft of version four of the Equator Principles (EPs), the international baseline for the identification, assessment and management of environmental and social risks in international project finance debt markets. EQUATOR PRINCIPLES IN A NUTSHELL •A framework for international banks to manage environmental and social impacts in project finance = risk management (due diligence and mitigation of risks) •Based on the IFC Performance Standards •92 EPFIs in 37 countries cover approximately 70% of project finance in emerging markets developed to establish a proper framework for neutral offset and net gains as per the IFC Performance Standards. The third iteration of the EP (EP III) was released on May 14, 2013 and will take effect (with certain transition allowances) on June 4, 2013. appropriate standards and practices so as to better reflect local conditions and priorities. The updated Standards, including new provisions related to climate change, business and human rights, supply chains, and free, prior, and informed consent, among other topics, were unanimously approved by 182 IFC member countries on May 12. This article assesses the impact of the voluntary framework on lending policies and practices, and the environmental and social accountability of financial institutions. The application of Performance Standards requires IFC’s clients to avoid, minimize or manage negative impacts. The final in-person consultation session on the new draft of the Equator Principles, EP4, took place in Toronto on Tuesday, July 30. Equator Principles and sustainability Within the Equator Principles and IFC Performance Standards on Social and Environmental Sustainabil-ity are initial ground rules for transparency and setting up feedback mechanisms that help address the complex questions related to sustainability. Equator Principles with the first set of Equator Principles. When the Equator Principles were first created, they were based on another set of well-known international sustainability standards: the International Finance Corporation, or ‘IFC’, Performance Standards. The IFC Performance Standards are an established and well-respected framework for ensuring sustainable development in developing countries. They have particular relevance to ANZ as we are a financier of projects in emerging Asian economies. • country, compliance with the assessment procedure, cultural heritage (IFC 2012). EPFIs also establish internal management systems to ensure that clients implement their projects in … Are there any alter-natives to the IFC Standards in emerging markets? MDB . In addition, projects in non-designated countries must comply with the IFC Performance Standards and the World Bank Group Environmental, Health and Safety Guidelines. The Equator Principles (EP) form two sets of principles. Project Finance with total Project capital costs of US$10 million or more. Equator Principles Association Adopts Equator Principles 4 By Latham & Watkins LLP on December 17, 2019 Posted in Environmental Regulation, Environmental, Social and Governance. • All projects will be reviewed for compliance with the EPs. IFC Performance Standards and HSE Guidelines They are the “standards” that more than 90% of the projects are evaluated against. IFC Performance Standards on Social and Environmental Sustainability . Principle 6 of the Equator Principles (EP) requires that, for all Category A and B projects, the borrower must create a “grievance mechanism” as part of the Environmental and Social Management System (ESMS). The Equator Principles is a risk management framework, adopted by financial institutions, for determining, assessing and managing environmental and social risk in project finance. difference. Around 20 stakeholders including Indigenous Peoples, sustainable business and socially responsible investors, and NGO advocates attended the session, which was the first and only EP4 in-person consultation that took place in the … Rate meet auditing requirements of cell sample ifc facility inspection checklist to provide details of these requirements of compliance. Equator Principles 2, 4, 5, and 6 if they meet host-country laws. convergence of standards used by the IFIs, particularly based on the International Finance Corporation’s (IFC) Performance Standards, and the Equator Principles, a set of similar standards adopted by a large number of private sector banks. 2. IFC’s Environmental, Health, and Safety (EHS) Guidelines provide technical guidelines with general and industry-specific examples of good … The REH Group ensures that its development activities comply with the requirements of the Equator Principles and International Finance Corporation’s (IFC) Performance Standards, These principles and standards provide global standards regarding public consultation and stakeholder engagement, the assessment and management of the environmental and social risks, … These standards are increasingly being used as the global benchmark for private sector projects. OECD Common Approaches, OECD MNE Guidelines, IFC Standards, ILO, Aarhus Convention and UN Guiding Principles for Human Rights however show some patterns of commonality and connection sufficiently deep and farreaching as to constitute an embryonic field The EP1 were based on the IFC’s Environmental and Social Safeguard Policies and Guidelines. updating the Performance Standards. We will start to implement the new Standards from January 1, 2012. Performance Standards for Private Sector Projects Supported by IBRD/IDA - On June 26, 2012, the Board of Executive Directors approved adoption and application of World Bank Performance Standards to be used for Bank financing or support (e.g., Partial Risk Guarantees) which is destined to projects, or components thereof, that are owned, constructed, and/or operated by … 2. The Equator Principles refer directly to the IFC Performance Standards and borrowers from an EPFI must demonstrate compliance. There are eight IFC Performance Standards (Table 1) which aim to strengthen social and environmental policy and practice and to guide project proponents and financiers. The Equator Principles. The LR OE Model delivers ISO compliance as a minimum requirement and has Plan-Do-Check-Act (PDCA) as an integral part of its DNA. However, concerns continue to be expressed that the equator principles reporting of banks is. Building on nearly two decades of collaboration, The Equator Principles Association (EPA) and the International Finance Corporation (IFC) today announced they are officially joining efforts to help strengthen the capacity of financial institutions to manage environmental and social risk in line with IFC’s Environmental and Social Performance … the IFC Environmental, Health, and Safety Guidelines for Mining2 and other IFC Performance Standards (PSs), Guidelines, and good international industry practices (GIIPs) as referenced therein; 2. Not just host country laws: for projects located in designated (high income OECD) countries, Equator Principles Financial Institutions (EPFIs) need to evaluate the specific risks of the project against the International Finance Corporation (IFC) performance standards where these may differ from host country laws. IFC works with clients to improve understanding of • The Equator Principles, a set of principles for social and environmental risk management in project finance that nearly 70 financial institutions have adopted worldwide, based on IFC’s Performance Standards • IFC’s Performance Standards, defining IFC clients’ roles and responsibilities for managing projects In reviewing the Equator Principles the article aims to achieve five, albeit modest, objectives: First, to provide a description and comparison of both sets of the Equator Principles and, where considered relevant, an explanation of the differences between each set and why they differ. 19 IFC 2006. The Equator Principles Association (EPA) has published a finalised version of Equator Principles IV (EPIV) following consultation. To no-one’s surprise, the updated Performance Standards incorporate free, prior, and informed consent (FPIC) in circumstances in which indigenous peoples are affected. More than 90 banks and financial … The first set of the EP (EP1), signed by ten equator banks (EB) in 2003, was conceived with the help of the International Finance Corporation (IFC) in 2002. In one of the IFC performance standards (IFC Performance Standard No. Review of Equator Principles projects ANZ adopted the Equator Principles in December 2006 with the goal to implement them across the project finance areas of our Institutional business by September 2007. They provide valuable guidance on how to address sensitive topics such as indigenous communities, filling … The Principles were updated in mid 2006 to reflect the recent revision of the IFC's Performance Standards, on which the Principles are based. Independent Review 8. There are industry specific guidelines for a wide range of industries. It is primarily intended to provide a minimum standard for due diligence to support responsible risk decision-making. Human Rights • General statement re: The EPs provide a minimum due diligence standard and monitoring protocol supporting responsible risk assessment and decision-making. The principles also use . Another danger lies in the fact that the Equator Principles are based exclusively on the safeguard policies of the International Finance Corporation (IFC). The Equator Principles are supplementary to the IFC’s own Performance Standards on Environmental and Social Sustainability and to the World Bank’s Environmental, Health and Safety Guidelines. From a risk management perspective, OMAI adopts a framework of adhering to local legislative requirements, Equator Principles, International Finance Corporation (IFC) Performance Standards and IFC Environmental, Health and The difference between an United States Council for International Business “generally meet or exceed the requirements of the IFC Performance Standards and EHS Guidelines”. We strive to provide accurate news and information about the Byzantine Catholic and other Eastern Christian Churches. The similarity between the IFC performance standards and the EPs can be seen in the following abbreviated list of the 10 EPs in their most current version. assessing any material divergences between host country laws and IFC Performance Standards, including with respect to human rights and climate change. On 18 November 2019, the Equator Principles Association published version four of the Equator Principles (EP4), updating the international baseline for the identification, assessment and management of environmental and social risks in international project finance debt markets. The Equator Principles (EP) are a risk management framework to assess and monitor potential adverse effects of large-capital projects on the natural environment and local communities. For an analysis of the main differences between the 2003 version and the 2006 revised version, see Watchman et.al 2007, 35-53. 2. For the NGOs that pushed so hard to win acceptance for the Equator Principles, having influence with the IFC will be a top priority. The Equator Principles apply to the financial products1 described below when supporting a new Project: 1. 18 In the case of High-Income OECD countries, the baseline is compliance with local or national law alone. Independent Monitoring & Reporting 10. Local and national laws are therefore considered as an adequate substitute for the IFC Performance Standards, EHS Guidelines and some of the Principles. The Equator Principles are designed to have effect primarily in countries with developing legal frameworks. In the financial markets worldwide, the Performance Standards have been catalyzing the swift convergence of standards for cross-border project finance. OECD Common Approaches, Equator Principles, and International Finance Corporation (IFC) Performance Standards. The Equator Principles – The Environmental and Social Project Appraisal Instrument Adopted by Most Private Financial Institutions » The IFC Environmental and Social Performance Standards » Project Categorization » Equator Principles Applied to Existing Operations » Changes in Project Financing » The Equator Principles and NGOs 20 Vogel 2010, 164. Under the proposed social and environmental sustainability policies, IFC and its clients grapple with a variety of international, national, and local obligations and expectations. The Equator Principles (EPs) are a framework for assessing and managing environmental and social risk associated with project financing. objectives and requirements of the International Finance Corporation (IFC) Performance Standard 7 – Indige-nous Peoples, which incorporate the principles of the United Nations Declaration on the Rights of Indigenous Peoples and the concept of Free, Prior and Informed Consent (FPIC). STATEMENT OF PRINCIPLES We will only provide loans directly to projects in the following circumstances: 1. More information Equator Principles official can be found on the website. The Equator Principles have always … Updated IFC Performance Standards– Summary and Analysis of Social Components Major Changes to the Performance Standards Free, Prior and Informed Consent – This is the big one. The Equator Principles are based on the International Finance Corporation (IFC) Performance Standards (PS) – revised in 2012. The IFC Performance Standards are at the heart of the Equator Principles, forming the technical framework on which the Principles were built. They provide valuable guidance on how to address sensitive topics such as indigenous communities, filling gaps left by environmental and social laws. Grievance Mechanism 7. The proposed changes to the EPs, if implemented, will require project sponsors and lenders … ESS3 Resource Efficiency and Pollution Prevention and Management recognizes that economic activity and urbanization often generate pollution to air, water, and land, and consume finite resources that may threaten people, ecosystem services and the environment at the local, regional, and global levels.This ESS sets out the requirements to address resource efficiency … 17 Equator Principles 2006. 99 banks and financial institutions operating in 37 countries have adopted the ‘Equator Principles’, embracing the IFC Performance Standards. Projects in all other (non-designated) countries need to comply with the IFC Performance Standards and the World Bank Group Environmental, Health and Safety Guidelines. 6 on Biodiversity Conservation and Sustainable Management of Living Natural Resources and Performance Standard No. Principle 3 (Applicable Environnemental and Social Standards) 1. Further Comments or Questions No further comment. Applicable Social & Environmental Standards 4. Consultation & Disclosure 6. The International Organization for Standardization, meanwhile, is paying close attention to the IFC guidelines as it builds its standards for corporate social responsibility. 1. 3. Project Finance Advisory Services where total Project capital costs are US$10 million or more. 5), land acquisition and involuntary resettlement becomes part of the assessment criteria for categorisation. EPIV broadens the scope of the Equator ... Project" to determine whether one or more of the IFC Performance Standards can be used as guidance to address those risks, in addition to host country laws. 21 Kulkarni 2009. Equator Principles. Our approach to social and project-related human rights risk Our approach to addressing social and project-related human rights risks and impacts is based on the requirements of the OECD Common Approaches and the Equator Principles. It is fully compliant with IFC Equator Principles and ESG requirements. signatory to the Equator Principles are required to implement IFC Performance Standard 6 (IFC PS6) which also deals with biodiversity conservation. The IFC Performance Standards are an international benchmark for identifying and managing environmental and social risk and has been adopted by many organizations as a key component of their environmental and social risk management. The Equator Principles (EP) is a risk management framework for determining, assessing and managing E&S risk in project development. ... International Finance Corporation Performance Standards. Projects in alignment with the IFC Performance Standards and World Bank EHS Guidelines, in addition to compliance with local E&S laws, regulations and standards. Equator Principles Financial Institutions (EPFIs) formulate their own environmental and social guidelines to comply with the Equator Principles framework, which in turn confirms compliance with the underlying IFC Performance Standards and World Bank Group EHS Guidelines. restore, offset), contributing to the alignment between development schemes and the International Financial Corporation (IFC) Performance Standards (PS6). ... for assessing and managing environmental and social risk in infrastructure investment that was taken directly from International Finance Corporation (IFC) Performance Standards on Environmental and Social Sustainability. Equator Principles Financial Institutions (EPFIs) formulate their own environmental and social guidelines to comply with the Equator Principles framework, which in turn confirms compliance with the underlying IFC Performance Standards and World Bank Group EHS Guidelines. ... performance ” (Equator Principles 2003, ... Assessment process has to comply with the IFC Performance Standards and with . IFC safeguards have also played a standard setting role in developing countries and amongst private banks involved in project finance. catalyzing the swift convergence of standards for cross-border project finance. The standards theory distinguishes between terminology standards, performance standards for output specifications, procedural standards and design standards. 3.3 Equator Principles III and IFC Sustainability Framework 25 3.4 IFC Performance Standards 2012 and IFC EHS Guidelines 28 3.5 JBIC and NEXI 67 3.6 ADB Safeguard Requirements 101 3.6.1 ADB Project Categorisation 101 3.6.2 ADB compliance review 103 4 Action plan 131 4.1 Overview 131 4.2 Environmental and social action plan 131 EPFI Reporting IFC Performance Standards: As highlighted above in the designated countries section, our preference is for the designated/non-designated distinction to be removed. OE delivers integrated performance across revenue, cost, and risk. Covenants 9. The Equator Principles, a set of social and environmental standards based on the IFC’s performance standards, has been adopted by 68 private financial institutions, including BNP Paribas, Citigroup and Lloyds TSB. The Equator Principles are a set of operational principles and standards adopted by more than 70 public and private financial institutions to manage environmental and social risks in project financing. Aligning procedures and behaviours with Equator Principles, IFC Standards and Guidelines as well as Good International Industry Practices is a way to avoid, mitigate, or compensate those risks in an acceptable way for lenders, as this demonstrates better governance of environmental and social issues and is linked to better financial performance. An Equator Principles Action Plan was proposed and accepted by the client to ensure the project will be developed and operated in accordance with all … The bank’s activities have continued to receive recognition by operators, funding partners and all other actors in the agribusiness space. The ESIA must conform to the requirements of the host country’s environmental assessment laws and regulations, including the relevant disclosure of information and public consultation requirements, and should be developed following principles of good international industry practice (e.g. While no set of principles or standards can guarantee results on the ground, the Equator Principles and IFC Performance Standards are widely regarded as a positive step beyond the mine mouth. IFC’s Performance Standard 2: Labor and Working Conditions: IFC sets standards for the private sector Through the Equator principles, other private sector actors and IFIs are adopting these standards too. As of March 2021, 116 financial institutions in 37 countries have officially … 32 export credit agencies of the OECD countries benchmark private sector projects against IFC's Performance Standards. considering the impact of the EP4 changes on their current Equator Principles compliance procedures and, in particular, human rights due diligence and climate change risk assessments. The Equator Principles are based on IFC’s Performance Standards and apply to projects that exceed $10 million. The first set of the EP (EP1), signed by ten equator banks (EB) in 2003, was conceived with the help of the International Finance Corporation (IFC) in 2002. Equator Principles. Performance Standard 6 has been the focus of a lot of attention and industry research with significant implications for … Nearly 80 banks and financial institutions have voluntarily adopted the Equator Principles, which are based on IFC's Performance Standards. sustainability guidance e-learning tool, IFC performance standards on Environmental and social sustainability, CERISE SPI4, CERISE Social Business Scorecard (SBS), AFI indicators, IRIS metrics, Equator Principles, ILO Conventions, EDFI principles for responsible financing and guidelines for fund investments; 1. In 2003, a number of banks adopted the Equator Principles (EPs), a voluntary Code of Conduct based on the International Finance Corporation's (IFC) performance standards, to ensure the ecological and social sustainability of project finance. Adopted by the Equator Principles Financial Institutions (EPFIs), these standards aim to ensure that projects financed are socially and In The IFC Performance Standards are at the heart of the Equator Principles, forming the technical framework on which the Principles were built. We have categorised the risk of a project in accordance with internal guidelines based upon the environmental and social screening criteria of the IFC as described in the attachment to these Principles (Exhibit I).
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