Glossary

Equator Principles

The Equator Principles are a voluntary framework for determining environmental and social risks associated with project finance. They are based on the ‘Performance Standards’ of the International Finance Corporation (IFC), the private sector arm of the World Bank. The Equator Principles have been adopted by over 70 banks for transactions over $10 million, although several loopholes exist and there is a lack of transparency in how they are applied. Criticisms have also been leveled at the fact that some of the signatories to the Principles are amongst the largest investors in fossil fuel extraction and coal-fired power plants, reflecting the limits of applying principles only to project finance in a context where bank and financial sector investment is increasingly moving directly onto capital markets.

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