Equator Principles Reporting 2022
About the Equator Principles
The Equator Principles are intended to serve as a common baseline and a risk management framework, adopted by financial institutions, for determining, assessing and managing environmental and social risk in projects. As a member since 2003, we apply these principles to ensure the projects we finance and advise on are developed in a manner that is socially responsible and reflects sound environmental management practices. Further, we use these principles as a platform for our own internal policies, procedures and standards for project due diligence.
Standard Chartered remains the Chair of the Equator Principles Association, with Amit Puri, Global Head of Sustainable Finance, fulfilling this role. As Chair of the Association we continue to support its progress as the leading risk management framework, including the implementation of the first ever Equator Principles strategy.
The Equator Principles apply to all project finance loans where total project capital costs exceed USD10 million.
The following 14 project finance transactions achieved financial close during the calendar year 2022:
| EA project categories1 | Cat A | Cat B | Cat C |
| Total | 6 | 7 | 1 |
| Sector2 | |||
| Mining | - | - | - |
| Infrastructure | 2 | 3 | 1 |
| Oil & Gas | 1 | 1 | - |
| Power | 3 | 3 | - |
| Others | - | - | - |
| Region2 | |||
| Americas | 1 | 2 | 1 |
| Europe, Middle East & Africa | 1 | 3 | - |
| Asia Pacific | 4 | 2 | - |
| Country Designation3 | |||
| Designated Country | 1 | 4 | 1 |
| Non-Designated Country | 5 | 3 | - |
| Independent Review4 | |||
| Yes | 6 | 7 | 1 |
| No | - | - | - |
1 Projects are categorised as A,B or C in relation to the magnitude of potential environmental and social risks and impacts. This is based on the International Finance Corporation’s (IFC) environmental and social categorisation process. For more detail please see EP4 guidance here
2Sector and regional names updated for 2021 to be consistent with those used by the EP
3 Designated Countries (previously named High-Income OECD Countries) are those countries deemed under EP to have robust environmental and social governance, legislation systems and institutional capacity designed to protect their people and the natural environment. Click here for the list of Designated Countries
4Carried out by an Independent E&S Consultant. For more detail please see Principle 7 of EP4
The Equator Principles apply to Project-Related Corporate loans where all three of the following criteria are met:
- The majority of the loan is related to a Project over which the client has Effective Operational Control (either direct or indirect)
- The total aggregate loan amount and individual commitment (before syndication or sell down) are each at least USD 50 million
- The loan tenor is at least two years
The following seven Project-Related Corporate Loans were subject to Equator Principles and achieved financial close during the calendar year 2022:
| EP Categories | Cat A | Cat B | Cat C |
| Total | 2 | 3 | 4 |
| Sector | |||
| General Manufacturing | - | - | 1 |
| Infrastructure | 2 | 3 | 3 |
| Oil & Gas | - | - | - |
| Power | - | - | - |
| Others | - | - | - |
| Region | |||
| Americas | - | - | - |
| Europe, Middle East & Africa | 1 | 1 | 2 |
| Asia Pacific | 1 | 2 | 2 |
| Country Designation | |||
| Designated Country | - | - | 1 |
| Non-Designated Country | 2 | 3 | 3 |
| Independent Review | |||
| Yes | 2 | 3 | 1 |
| No | - | - | 3 |
The Equator Principles apply to all project-related refinance and project-related acquisition finance, where all of the following three criteria are met:
- The underlying Project was financed in accordance with the Equator Principles framework
- There has been no material change in the scale or scope of the Project
- Project Completion has not yet occurred at the time of the signing of the facility or loan agreement
Nothing to report in 2022.
Applying the Equator Principles
We have a team of internal environmental and social specialists (known as Environmental and Social Risk Management / ‘ESRM’) who support our business teams in ensuring that the Equator Principles are correctly applied to within-scope transactions. The ESRM team sits within Sustainable Finance, and ensure the Bank’s systems and controls accurately embed our obligations as an Equator Principles signatory. This approach is governed by the Bank’s Reputational Risk and Sustainability Framework.
The ESRM team must be engaged by business teams to confirm Equator Principles categorisation in all identified Equator Principles transactions. This includes the review of environmental and social due diligence reports or advising on specific requirements of the Principles. For those projects that fall outside the obligations of the Equator Principles, the ESRM team ensures the correct application of our internal policies, procedures and standards.
During the 2022 reporting period, the ESRM team reviewed more than 1,170 clients and 550 transactions in relation to environmental and social risk matters, including 31 Equator Principles projects. Further, the team delivered training on ESRM, including the Equator Principles, to over 4,944 business and risk representatives, to highlight procedural requirements and supporting resources.
Find out more about the Equator Principles and view Standard Chartered’s EP reporting for previous years.