The Equator Principles (EPs) are codes of conduct for project finance on the sustainability impacts of a project and on the risk assessment procedures of financial institutions that have adopted the principles — Equator Principles Financial Institutions (EPFIs). The EPs were launched 10 years ago and have undergone three revisions, while the EPFIs have increased from 10 to 78 members in 2013. This paper correlates these 10 years of existence to the adolescent stage of the EPs, still seeking to establish relevance. Environmental and social assessment of projects is increasing in global adoption and scope and the EPs strive to redefine these assessment practices. Critics reason, however, that without implementation efforts and enforcement, the EPs are merely window dressing and will not contribute to any change to sustainable development. The authors point out gaps in how EPFIs address the implementation of guidelines in project finance decision making, how projects implement environmental and social assessment processes in practice and whether the implementation will have a positive effect on project sustainability. The paper concludes that these gaps need further research and analysis to better understand the role of the EPs in sustainable development.

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CIGI Papers present in-depth analysis and discussion on governance-related subjects. They include policy papers that present CIGI experts' positions or contributions to policy debates, and background papers that contain research findings, insights and data that contribute to the development of policy positions.
  • Olaf Weber is a CIGI senior fellow and an expert on sustainability and the banking sector. He is currently a professor in the School of Environment, Enterprise and Development at the University of Waterloo and a University of Waterloo Research Chair in Sustainable Finance.

  • Emmanuel Acheta was a research financial analyst at the University of Waterloo before becoming a doctoral student at the University of Waterloo’s School of Environment, Resources and Sustainability in the sustainability policy and governance program.