The Equator Principles (EP) are international guidelines that provide support to financial institutions, voluntarily applying them when financing projects related to large infrastructures and industrial plants, such as energy plants, oil refineries, mines, transport and telecommunications infrastructures.
The banks adopting and subsequently implementing the Principles (Equator Principles Financial Institutions - EPFIs) must be equipped with organisational structures and tools to identify, assess and manage social and environmental risk associated with the projects under consideration for financing.
Launched in 2003 and initially adopted by 10 financial institutions, the Principles are based on the Performance Standard (PS) of the World Bank’s International Finance Corporation (IFC) and on the Environment, Health and Safety Guidelines (EHS Guidelines). Now adopted by more than 100 institutions worldwide, the EP are they are recognized as one of the most authoritative benchmarks, for the financial sector, in the field of social and environmental risk management resulting from financing activities.
The adoption of the Principles by an increasing number of financial institutions is a key lever for the dissemination of good practices and helps to strengthen, more broadly, the dialogue around sustainable finance.
2019 saw the launch, by the EP Association, of the new EP IV, which will officially come into force in October 2020 and that widen the scope, with the inclusion of some types of loans related to refinancing and acquisitions and with lowering the application threshold for certain funding categories. The requirements for projects in OECD countries are also becoming more stringent and there is a clear commitment to respect for human rights, in line with the United Nations Guiding Principles on Business and Human Rights (UNGP), and the fight against climate change with reference to the 2015 Paris Agreement.
In October 2020 the new "EP IV" standards came into force, extending the scope of application to refinancing loans and acquisition loans, and lowering the threshold for project-related corporate loans to 50 million dollars. The Group actively participated in the review process, making its contribution together with the other members of the Association.
On climate change in particular, the new EPIVs make explicit reference to the recommendations of the Task Force on Climate-related Financial Disclosure (TCFD), for example, calling for the evaluation of a project to include, among other things, the analysis of both physical and transition risks, based on the definitions of TCFD. Intesa Sanpaolo actively took part in the review process and contributed during the work together with the other members of the Association.
Last updated 4 May 2021 at 15:10:41