Sustainable finance & investment
Equator Principles
Definition
The Equator Principles are a risk-management framework, adopted by financial institutions since 2003, for identifying, assessing and managing environmental and social risks when financing projects. They apply primarily to project finance above USD 10 million in total capital costs, plus related corporate loans, bridge loans and advisory mandates.
References
framework purpose, EP4 timeline
application scope, adoption history
Overview
What it means
Signatory institutions commit to applying the Principles — based on IFC Performance Standards and World Bank Group EHS Guidelines — including categorising projects by risk, requiring assessment and action plans, covenants and monitoring for higher-risk deals. The fourth iteration, EP4, took effect in October 2020; the EP Association legal entity was dissolved in 2024, with signatories continuing collectively.
How it is used
Used by over a hundred banks in project-finance credit processes worldwide; referenced in syndications and export-credit practice.
Why it matters
The Principles set the de facto global standard for environmental and social risk management in project finance.