Building on nearly two decades of collaboration, The Equator Principles Association (EPA) and the International Finance Corporation (IFC) today announced they are officially joining efforts to help strengthen the capacity of financial institutions to manage environmental and social risk in line with IFC’s Environmental and Social Performance Standards.
IFC’s Performance Standards are the most comprehensive and practical approach to managing environmental and social risks for private investments in emerging markets, and areconsidered an international benchmark. The Equator Principles, launched in 2003 and now adopted by 101 financial institutions from 38 countries, were based on IFC’s Performance Standards. The principlesprovide a framework for financial institutions to manage environmental and social risk in projects. Over the years, the Equator Principles signatories have drawn from IFC’s extensive technical resources and have worked closely with IFC to develop practitioner knowledge on environmental and social risk management.
Today, at a coordination meeting, the EPA and IFC signed a Memorandum of Understanding (MoU), outlining the collaboration’s key tenet – to expand existing training and capacity building on Performance Standards.
At the MOU signing in Paris, alongside the OECD Financial Institutions Practitioners Workshop, Chair of the Equator Principles Amit Puri of Standard Chartered, noted:
“The EPA has for many years benefited from the considerable effort the IFC has invested in developing and updating the industry leading Performance Standards and associated guidance. With more than 100 members in the EPA comprised of commercial banks, development banks and export credit agencies in all of IFC’s regional markets, we are proud to be formalising efforts with the IFC to develop capacity building and training on these benchmark standards. Our objective is to ensure that all EPA members apply the Performance Standards and related technical resources – which capture invaluable and critical insights from numerous practitioners and experts around the world – with the rigour and consistency with which they are intended and spread good practice amongst financial institutions wherever feasible.”
Mary Peschka Porter, IFC’s Director of the Environment, Social & Governance (ESG), commented that:
“The rapid adoption of the Equator Principles over the past 16 years demonstrates the clear ambition of the global financial community to promote environmental and social standards and accelerate sustainability efforts. Seizing this momentum is critical – particularly in emerging markets where embedding sustainable finance in the practices of local financial institutions can prove challenging. Through our formalized collaboration, IFC and EPA can more systematically bridge the technical gaps in ESG knowledge that remain in project diligence and portfolio management, helping strengthen the capacity of financial institutions and build sustainable financial markets.”
Following the MOU signing, a joint work plan will be developed and implemented over the coming years.