Are you finding it overwhelming to track all the changes in ESG standards?  We’ve broken down the changes in one of the most relevant sets of guidelines for international lenders and businesses – the Equator Principles (EPs) – into one simple diagram.

The EPs are a risk management framework adopted by financial institutions (EPFIs) for determining, assessing and managing environmental and social risk in projects. They define a minimum standard for due diligence and monitoring to support responsible risk decision-making.

The public comment periods for the most recent EP revisions (EP4) have concluded and the EPFIs will soon agree to final changes. In Acorn International’s experience as industry environmental, social and governance (ESG) experts as well as lender independent and social consultants (IESC), the key changes that will be most notable for borrowers on international project finance and similar transactions are related to:

  • – Scope of applicability of the Principles
  • – Human rights due diligence and Free, Prior and Informed Consent (FPIC) where there may be impact to indigenous people, and
  • – Climate change risk assessment, alternative analyses and disclosure requirements.

Additional detail on the proposed changes and the significance of each is shown in the figure below.

Acorn International continues to follow the changes and application of EP4 closely, and we look forward to helping our industry and investor clients meet these and other industry standards efficiently. Our objective is to help clients operate profitably in complex and challenging environments by proactively and systematically managing complicated community, environmental, and shareholder challenges – the same challenges that the Equator Principles were established to manage.

Acorn International LLC delivers social and environmental risk management consulting services to the extractive industries and investors worldwide. We work with local partners in over 70+ countries worldwide. Use of these local specialists is paramount, particularly in developing countries, where information is often scarce, second-hand, and unreliable. We look forward to engaging in continuous improvement for the industry and building capacity with our partners.

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Acorn International

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Houston, TX 77007, USA

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New Bedford, MA 02740, USA


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