Voluntary Bank Lending Principles Now Include Consideration Of Climate Change

Effective June 4, the members of the Equator Principles Association voted to amend and strengthen the Equator Principles to include consideration of the effects of major projects on climate. The Equator Principles are voluntary standards designed to guide banks in their evaluation and management of the environmental and social risks presented by loans used to finance large projects. The Equator Principles are based on Performance Standards developed by the International Finance Corporation ("IFC"), part of the World Bank Group. The Principles provide that member banks will give loans only to covered projects that meet its 10 principles.

At their core, the Equator Principles provide that lending banks will require borrowers associated with major projects to assess the environmental and social risks of their proposed projects and to address issues raised by the assessment. At a minimum, borrowers must comply with the laws of the host country that pertain