Today, in an open letter, civil society organisations coordinated by BankTrack, Friends of the Earth US and Women’s Earth and Climate Action Network (WECAN), call upon the Equator Principles Association to take immediate action on climate, biodiversity and human and Indigenous rights. The call comes during the Association’s annual general meeting this week.

The letter includes a set of clear expectations for the Association and financial institutions that are signatories to the Principles. It first asks the Association to exclude finance under the Principles for any new fossil fuel exploration, extraction and expansion projects (1) as well as adopt a “No Go” policy for high biodiverse areas (2).

Secondly, the organisations call upon the Equator Principles to reject false solutions, such as carbon and biodiversity offsets that are based on the “no net loss” concept (3) or current “net-zero” commitments that do not include concrete fossil-fuel phase out plans (4). In addition, EPFIs are called upon to  reject the vague, ineffective, “nature-based solutions” approach to solving the climate and biodiversity crisis (5).

Finally, civil society is calling on the Association to ensure that the Principles no longer allow finance to be provided to projects that abuse human and Indigenous rights and to ensure the proper implementation of Free, Prior and Informed Consent (FPIC) process for all Indigenous Peoples and local communities as enshrined  in the Universal Declaration on the Rights of Indigenous Peoples (6).

The Equator Principles is an environmental and social risk management framework with over 120 signatory financial institutions, including some of the biggest banks in the world. In the letter, organisations emphasize that concrete action from the Association would represent a significant and positive step forward for the financial sector as a whole and that these demands are the necessary first step towards supporting a just transition.

Last month, BankTrack research exposed the extent of fossil fuel finance provided under the Equator Principles since the Paris Climate Agreement. Despite EPFIs committing to “support the objectives of the Paris Climate Agreement” in the preamble of the newest iteration of the Principles, they have been involved in financing at least 200 fossil fuel projects between 2016 and 2020. These projects are not only destructive to the climate, but typically also have severe impacts on the environment and local communities.

The letter is sent in the wake of both the Convention on Biological Diversity (CBD) COP15 in Kunming and the climate COP26 in Glasgow where over 100 countries took the pledge to stop deforestation by 2030 and to reduce methane emissions, with a further 39 governments and financial institutions pledging to stop financing fossil fuels abroad. The final COP26 text agreed upon falls far short of what needs to be done to stay within 1.5 degrees of warming, however it does include a historic reference to fossil fuels. Despite a number of climate commitments being announced by banks during the course of COP26, none presented concrete fossil fuel phase out plans including an immediate end to finance for all new fossil fuel projects. In October this year, La Banque Postale became the first bank to commit to a complete exit from oil and gas, both conventional and unconventional, by 2030. However, this move has not been replicated by any other Equator bank to date.

Hannah Greep, Equator Principles Campaign Coordinator at BankTrack: “We have engaged with the EPA on countless occasions to push for more concrete action on climate, biodiversity and human rights. Most recently, we called upon the association to publish position statements ahead of both the biodiversity and climate COPs in the past two months, but they failed to publish a meaningful statement outlining how the Association will address the climate and biodiversity crises. It is more clear than ever before that we are running out of time and the urgency of the situation calls for more than empty commitments from banks. By implementing our expectations, the EPA would show true leadership in the financial sector and make clear their commitment to a just transition.”

Osprey Orielle Lake, Executive Director of the Women's Earth and Climate Action Network (WECAN): “Despite our many advocacy efforts with the EPA , the Association continues to avoid publishing position statements on any tangible action on climate, biodiversity, and human and Indigenous rights. The recent CBD COP15 in Kunming and the UNFCCC COP26 in Glasgow have clearly demonstrated the urgency of this moment for human survival. What is needed immediately from the EP banks is a show of leadership and dedication to ecological sustainability and respect for human and Indigenous rights, as we face the unprecedented challenges of a world plunging into climate and ecological crises. At the upcoming EPA  annual meeting we are calling for deep commitments to people and the planet, which means divestment from fossil fuels and  implementing policies that uphold the right of Free, Prior, and Informed Consent, and that protect the ecological integrity of biodiverse areas and ensure healthy communities for all."

Katharine Lu, International Sustainable Finance Manager at Friends of the Earth US: “The world is in a climate and biodiversity crisis and yet Equator Principle banks stand idly by, hemming and hawing about what they should do. The truth is that it’s quite clear what EP banks should do. Exclude financing to fossil fuels. Prohibit harmful financing to projects which degrade the few, critical ecosystems we have left. Abandon false solutions like offset schemes. Require Free, Prior, Informed Consent. The solutions are here, but the courage and resolve to implement them is not.”