On August 13, 2012, following the recent conclusion of a strategic review launched in October 2010, the Equator Principles Association (EPA) released the latest draft of the Equator Principles (EP III), and related FAQ, for stakeholder consultation and public comment as phase II in the process to revise the Equator Principles. The review was conducted in order to ensure that the Equator Principles remain the “gold standard” in environmental and social risk management for project finance.
Noteworthy changes in EP III include:
- Extending the scope of the Equator Principles to include project-related corporate loans and bridge loans;
- Changes reflecting the recent update of the International Finance Corporation’s Performance Standards;
- New requirements regarding the management of impacts on climate;
- Increased emphasis on human rights considerations in due diligence, including an acknowledgement of the United Nations’ “Protect, Respect and Remedy” Framework for Business and Human Rights and Guiding Principles on Business and Human Rights; and
- Strengthening of reporting and transparency requirements.
The public comment period runs through October 12, 2012. At the conclusion of phase II, EPA will review comments received and prepare a final revision of the Equator Principles for release targeted in January 2013.