Equator Principles

The Equator Principles (EP) are a set of voluntary guidelines to promote corporate social responsibility (CSR) in project finance. According to the EP website, in project financing “a lender looks primarily to the revenues generated by a single project both as the source of repayment and as security for the exposure.” Project finance is often defined as involving “the creation of a legally independent project company financed with equity from one or more sponsoring firms and nonrecourse debt for the purpose of investing in a capital asset.” As these projects involve independent companies, they are not automatically covered under the involved financial institutions’ own CSR policies. The EP were launched in June 2003 by a group of private sector banks to address this lacuna; in ...