Principles, profits or just PR?: triple p investments under the Equator Principles

One year after a number of private financial institutions announced the first collective norms addressing environmental and social issues in the sector (the Equator Principles (EPs)), this report examines its successes and failures. With the influence of the private financial sector growing immensely over the last decade, the EPs attempt to mitigate environmental and social risk associated with financing projects in the world’s most fragile ecosystems.

Nevertheless, as the paper illustrates with a number of case studies, there are still a number of environmentally and socially controversial transactions financed by "Equator banks" since the launch of the Principles. The paper also points out that the levels of implementation into the internal structure of endorsing banks varies greatly. Presumably, banks that have existing environmental management systems, including environmental personnel, procedures and standards, will have a significant head start in implementation.

Generally, the report offers the following recommendations:

• banks need to actively conduct their own social and environmental due diligence, and not rely on the IFC or other public institutions
• there should be a focus away from recruiting new signatories, and instead concentrate on assisting endorsers with implementation and promoting regular public reporting
• EP banks should install an accountability system aimed at ensuring the core principles of independence, transparency, accountability, effectiveness, and fairness
• adopting a more collaborative and open approach towards stakeholder dialogue would increase public confidence in the Principles
• banks should play a proactive role in further supporting improvements to international environmental and social policies and standards.