The Equator Principles are a voluntary code of conduct and a risk management framework for determining, assessing and managing environmental and social risks in projects, such as energy or infrastructure projects. Since their foundation in 2003, they were lauded for integrating social and environmental assessment practices into project assessments. Critics reason, however, that without fundamental implementation efforts and enforcement, the Equator Principles will not contribute to any change with respect to effects of projects on sustainable development.
In this report, The Equator Principles: Do they make banks more sustainable?, to analyse their effects, a literature analysis, interviews with project financiers and stakeholders, and an analysis of Equator Principles signatories’ reports were conducted. The results suggest that the Equator Principles are mainly adopted because of reputational benefits and risk management and that they do not create significant changes in project financing institutions. Our conclusions are that criteria should be implemented that define sustainability thresholds for projects to be financed and that enforcement mechanisms are needed to guarantee the compliance of the signatories with the principles.
This paper was presented at the UNEP Inquiry/Centre for International Governance Innovation Academic Symposium on the Design of a Sustainable Financial System, held in Waterloo (Canada) in December 2014.
This paper describes the challenge of modelling combined economic, ecological and financial systems and sets out a series of objectives for modelling the socio-economic transition towards sustainability.
Policy-driven institutions such as national development banks (NDBs) and national green funds (NGFs) attract a growing interest to provide grants, credit-enhancement instruments or lend directly to project proponents in specific green sectors, with billions of dollars allocated by governments to
Over 200 years ago, Adam Smith put forward the notion that individuals seeking to benefit themselves through trade were led as if by an invisible hand to a situation in which society as a whole could benefit.