Equator Principles

The Equator Principles are a set of standards that address environmental and social risk in project financing. The principles have been signed-up to by the vast majority of the world's leading financial institutions, meaning that they commit to not lending to projects or prospective borrowers who cannot comply with the procedures stipulated in the Equator Principles. The result of this is that the signatory institutions are effectively ensuring that the projects they finance are socially and environmentally responsible.

The principles set out necessary procedure for lending institutions to take, with regards to environmental and social responsibility, before lending to a prospective borrower. These include a categorization of the project, a basic social and environmental assessment, identification of relevant standards, evidence of an action plan and proof of legal compliance (as well as other principles). Only when the lending institution is comfortable that all of these are fulfilled may they lend to the proposed project.