Equator Principles Strategy

Today, the Equator Principles launches it first ever Strategy. From our humble beginnings in 2003, we are now truly the gold standard for environmental and social risk management for Project Financing. This is evidenced not least by the growth in the Association, currently with 111 member Financial Institutions, an increase of 11 new adoptees in 2020.

The Strategy, supported by 100% of participating Equator Principles Financial Institutions, sets out the direction of travel for the Association over the next few years and identifies the key areas it will focus on, namely governance, transparency, reporting, membership and training.

It has been a busy year for the Equator Principles Association. We have successfully launched Equator Principles version 4 (“EP4”) and supporting guidance, signed our first MOU with the IFC on an accreditation program and also published guidance on the application of the Equator Principles during the pandemic.

But why do environmental and social risk management frameworks such as the Equator Principles continue to matter?

• Firstly, they represent a publicly declared and shared ambition to manage environmental and social risks; 
•  Secondly, membership of such Associations is increasingly seen as a proxy for good governance with institutions striving for positive environmental and social outcomes; 
•  And finally, managing environmental and social risk is the jumping off point for all Sustainable Finance. 

This year in particular has seen a rush of commitments targets, alliances, and initiatives in relation to Sustainable Finance. Without stringent environmental and social risk management frameworks, principles and approaches, which are robustly and consistently applied, Capital needs to ensure it is not doing more harm than good in its pursuit of a cleaner, greener, equitable future.

The climate emergency, the vast gap in funding the SDGs by 2030 and the current motivation to stimulate economies and markets with a “build back better” mantra cannot be used as a blueprint for taking shortcuts. 

At Standard Chartered we are acutely aware of this. As an emerging market focussed Bank, we know first-hand how critical it is to manage environmental and social risk while pursuing sustainable finance opportunities. This has been in our DNA for over 150 years.

We have organised ourselves such that our environmental and social risk management team is embedded within the front line, supporting and challenging our client coverage teams to continually improve our client’s environmental and social performance. We have created a framework guiding how we approach and classify green and sustainable products with a heavy focus on managing risks as well as identifying opportunities. 

Our commitment to lend and facilitate $75bn towards renewables and sustainable infrastructure is underpinned by robust application of our environmental and social risk management framework, including the Equator Principles.

Current events have shown us how interconnected and fragile people, planet and biodiversity really are. When Associations such as the Equator Principles create a progressive and ambitious Strategy, we should celebrate and support their endeavours. 

As current Chair, I’m immensely proud of the future direction the Equator Principles Association is taking and grateful for Standard Chartered’s continued encouragement to pursue this appointment.