The equator principles: Do they make banks more sustainable?

This working paper developed following a workshop convened by the UNEP Inquiry and the Centre for International Governance Innovation (CIGI) on 2–3 December 2014 in Waterloo, Canada, critically examines a voluntary risk assessment framework adopted by leading financial institutions to manage environmental and social risks in project finance. The workshop gathered experts from institutions including the University of Waterloo, University of London, Harvard University, and University of Gothenburg, contributing diverse academic perspectives. Focusing on sectors such as oil, gas, mining, and infrastructure—frequently linked to land degradation, displacement, and emissions—the paper evaluates whether the Equator Principles lead to tangible improvements in project outcomes. The document finds that adoption is largely driven by reputational and compliance motives, and the absence of binding thresholds, enforceable standards, and transparent reporting weakens the framework’s effectiveness. It recommends the introduction of independent audits, project-level disclosure, and clear exclusion criteria.