The Equator Principles / Why this campaign

The Equator Principles (EPs) are a framework used by banks for assessing and managing environmental and social risk when financing large infrastructure projects.

Banks that adopt the EPs commit to "ensure that the projects they finance and advise on are developed in a manner that is socially responsible and reflects sound environmental management practices". They "recognise the importance of climate change, biodiversity, and human rights, and believe negative impacts on project-affected ecosystems, communities, and the climate should be avoided where possible". Projects financed ‘under the EPs’ must meet the requirements of the Performance Standards of the International Finance Corporation (IFC), the private arm of the World Bank, or local legal requirements that are considered equivalent or exceeding these standards. Adopting banks promise to not finance projects which do not comply with the EPs.

Banks apply the EPs first and foremost out of a well understood self-interest, as they need to properly understand, assess and mitigate all risks that may impact on the profitability of a project, and therefore on the repayment of the finance provided. The positive benefits that may result from this for affected communities and for the environment are of secondary importance.

The EPs are currently adopted by 91 financial institutions, mostly banks, from 37 countries. Though adoption is voluntary, the EPs are considered binding by all banks that have adopted them. Every adopting banks becomes a member of the Equator Principles Association (EPA), the body tasked with the management, administration and development of the EPs. The EPA is governed by a Steering Committee of ten banks, currently chaired by Standard Bank of South Africa.

The Equator Principles & Climate Change

Given that the EPs are primarily a risk management tool for banks, it is astonishing how little attention they pay to the biggest risk of all; runaway climate change affecting the entire globe and therefore all business activities of banks and their clients. The very word ‘climate’ did not even appear in earlier versions of the EPs! Only the 2013 version (EPIII) "recognises the importance of climate change …  and believe negative impacts on ... the climate should be avoided where possible".

Sadly, this recognition is of no consequence to the sort of projects that can be financed under the EPs. Nearly all Equator Banks are ready to finance oil pipelines, tar sands exploration, coal power plants, coal mines, offshore and arctic oil drilling projects, refineries, LNG plants and other high impact ‘climate disaster projects’, as long as they meet technical standards, avoid negative local environmental and social impacts, and dutifully report on their operational greenhouse gas emissions.

As long as the Equator Principles do not consider the climate impact of fossil fuel projects a severe risk to the planet, one that must be managed by avoiding such projects altogether, the EPs cannot be considered an effective risk management tool for banks, let alone a serious commitment of banks to do their part in stopping catastrophic climate change from unfolding.

Equator banks therefore must Stop Financing Climate Disasters, by:

  • including a full commitment to the Paris Agreement goal of limiting global temperature rise to we below 2 degrees, aiming for 1,5 degrees;
  • including stringent and binding criteria that all projects to be financed under the Equator framework be fully aligned with reaching the Paris Agreement goals; and for this reason:
  • explicitly exclude all new fossil fuel extraction, transportation and power projects from financing under the Equator Principles.

The Equator Principles & Indigenous Peoples’ rights

The EPs require that ‘projects affecting indigenous peoples will be subject to a process of Informed Consultation and Participation, and will need to comply with the rights and protections for indigenous peoples contained in relevant national law, including those laws implementing host country obligations under international law.’ In doing so they make a distinction between ‘Designated’ and ‘non-Designated’ countries:

Designated countries (usually high income countries) are deemed to have robust environmental and social legislation in place, so projects must comply with national legislation to be Equator compliant. This presumes that the rights of Indigenous Peoples, for example their internationally recognised right to withhold consent for projects situated on their traditional territories, are also secured in, and implemented by national law of designated countries. The Dakota Access Pipeline, constructed without consent from the Sioux, has shown this to be a false assumption – and has even led to a proposal of ten Equator Banks to do away with this distinction between Designated and non-Designated countries.

If a project is located in a non-designated country (mostly poor countries), projects must meet the requirements of the Performance Standards of the IFC, in particular 'PS7' on indigenous peoples, this on top of local legislation.

PS7 contains laudable language on a range of conditions that must be met, on for example avoiding impacts, on consultation and obtaining consent, on relocation, cultural heritage, intellectual property rights, benefit sharing etc. The problem is that PS7 also does not provide sufficient guarantee that Indigenous Peoples can exercise their full right to withhold their so called Free, Prior and Informed Consent (FPIC) for a project. Worse, there are many examples of projects that went ahead with finance from Equator Banks, where requirements on paper were not met in practice, as illustrated by the Agua Zarca hydro project in Honduras and other ‘Equator Disaster projects’ listed on this site.

Equator banks must make a stronger commitment to respect Indigenous Peoples rights and territories, by:

  • including an explicit commitment to respect the right of Indigenous Peoples anywhere in the world to withhold their consent for projects situated on territories they traditionally use and occupy;
  • committing to not financing projects, neither directly or indirectly, that did not obtain such consent;
  • strengthening due diligence and consultation processes to ensure that Indigenous Peoples’ rights are fully respected;
  • ensuring that Indigenous Peoples and other project-affected communities have full access to grievance channels with project sponsors and financing banks when their rights and interests are violated.

Revise the Principles!

The current version of the Equator Principles stem from 2013, way before nearly all countries agreed in Paris in 2015 on strong goals to limit climate change, and with now numerous examples in place of projects that show that the Equator Principles do not deliver what the world needs from banks; genuine commitments to do it right!

We therefore call on Equator Banks to get better, to start a public consultation process, with all stakeholders involved, that is to lead to a new set of Principles that much better serve both the need of banks to manage their business risks, and the interest of wider society that banks only finance projects that are good for people and planet.

On August 29, the initiative group behind this campaign sent a letter to the Equator Principles Association urging the EPA to act on all the issues listed above. On September 8, the EPA responded to our letter, which made clear that we are still far removed from seeing the Equator Banks Act!

Equator Banks, Act!
Stop financing Climate Disasters
Respect Indigenous People's Rights and Territories


As of October 31, the petition is closed.

A big thank you to all organisations and individuals that signed up to support our call.

See who signed here.