Equator Principles face crucial test as Brazil annual meeting starts today
Johan Frijns, firstname.lastname@example.org, +31 24 324 9220
Johan Frijns, email@example.com, +31 24 324 9220
As the annual meeting of the Equator Principles Association begins in São Paulo today, the banking platform is faced with the challenge of how to properly respond to a widespread public call for a significant revision to the standards.
Expectations on the meeting are high. Whereas the outcomes of earlier annual meetings often went unreported both by financial press and the Association itself, announcements of the result of this year’s event are eagerly awaited by hundreds of environmental and indigenous organisations, as well as institutional investors and religious and ethical organisations.
The global "Equator Banks, Act!" petition launched two months ago, which calls on the 91 Equator banks to replace the current Principles with a new set of commitments that acknowledge the responsibility of banks to act decisively on preventing accelerating climate change and fully respect Indigenous Peoples’ rights and territories when financing projects, received the support of 246 organisations and well over 110,000 individuals.
In addition, dozens of groups around the world have heeded the #DivestTheGlobe call by Indigenous platform Mazaska Talks, to join three days of protest during the course of the annual meeting. The campaign website registered actions in 44 cities in the United States and Canada yesterday, with more to come in Europe and Asia as the meeting proceeds.
Meanwhile, an interfaith group of 98 religious and ethical organizations and individuals has called on five US banks to cease financing fossil fuel projects, and investors have expressed support for a reform of the Equator Principles as proposed by ten Equator banks itself.
BankTrack wrote to the 91 Equator Principles signatory banks at the start of last week warning that in light of these public expectations, inaction at the meeting “cannot be an option”, as it would deal a fatal blow to the reputation of the Principles as the bank platform for innovation in sustainability risk management, and may well trigger a steep increase in resistance to bank finance for projects that trample Indigenous rights and contribute to wrecking the climate, under an Equator stamp of approval.
Johan Frijns, BankTrack Director said: “We trust that the EPA will see that a set of Principles that has only been moderately revised once since its inception in 2003 can no longer be the basis for how banks deal with climate risk in a post-Paris agreement world. Equator Banks that are serious about ‘managing risks’ must confront the immense risk posed by fossil fuel projects on the world’s climate, and this risk must become a reason for rejecting financing these projects. The alternative for the Association is to be seen as actively accommodating the financing of projects that lead to a further deepening of the climate crisis and a deterioration of the plight of Indigenous Peoples.”
Patrick McCully, Rainforest Action Network Climate and Energy Director said: “The bottom line is that the Equator Principles need a serious reworking. Without meaningful protections for the climate and Indigenous rights, the Principles will continue to fail us in aligning finance flows with the goals of the Paris Agreement. With our world unraveling in climate disaster after climate disaster, we must demand greater ambition from the financial industry and the Equator Principles Association.”
Kelly Martin, Sierra Club Beyond Dirty Fuels Director said: "Equator Bank support for projects like the Dakota Access Pipeline - projects that are mired in legal fights and violent crackdowns on Indigenous communities who are denied their rights - have made it clear that the Principles are failing as a risk management tool. The Equator Principles should first and foremost respect the rights of First Nations people and take seriously the threat of climate change."
Jackie Fielder, Co-founder Mazaska Talks said: “The futility of the Equator Principles to uphold internationally recognized standards for climate change mitigation and indigenous rights shows that it is up to us to divest from Big Banks and re-invest in community banks, public banks, credit unions, and B-corp banks that invest in our communities.”
Cecilia Gomez, Women’s March Barcelona said: “Women are disproportionately affected by climate change. At the same time women’s control of household spending is on the rise throughout the world. These two issues are intrinsically linked and our awareness is growing. We must join with organizations that are fighting on the front lines to mitigate these disasters and push the banks that invest our money to do the same.”
Doug Norlen, Economic Policy Director for Friends of the Earth US said: “The Equator Banks have failed to adopt robust standards to protect indigenous communities and tackle climate change, despite the global imperative to do so. If we are to save ourselves from the rising tides of climate change, banks should at least stop making holes in the boat.”
Vanessa Green, Director of DivestInvest Individual said: “These financial institutions are among the most well resourced companies in the world, entrusted with managing and minimizing the risk of massive amounts of investor and other capital. If they are not responsive to the clear inadequacy of the Equator Principles in their current form, and are not computing the risks of financing large fossil fuel infrastructure projects that harm people, communities and land, then they cannot be the companies to manage that capital any longer. Fortunately, the leadership and staff of many other large and small institutions are putting the work in to revise principles, policies and practices to attract the socially responsible and carbon conscious investors of today - and tomorrow."
Leila Salazar-López, Executive Director of Amazon Watch said: “As we see and feel the impacts of climate change, it is clear that the Equator Principles have failed to hold banks to standards that adequately account for their role in funding the climate crisis and the continued violation of Indigenous Peoples’ rights. If they don’t take bold action today, these financial institutions will continue to find themselves confronted by those of us who care for the planet and our Indigenous brothers and sisters, from the Arctic to the Amazon.”
Osprey Orielle Lake, Executive Director and Founder of the Women’s Earth and Climate Action Network (WECAN) said: “We need the Equator Banks to stop business as usual with the fossil fuel industry given egregious violations against Indigenous Peoples and their rights and given the urgency of climate change. Since guidelines that are supposed to uphold rights are failing, then the Equator Principles must be revised to take into account Indigenous rights and climate chaos. There is no time to lose as climate disruption escalates and people around the world face life and death situations. Financial institutions must course correct now, so that we all can look towards a better future.”
Robin Martinez, attorney with the National Lawyers Guild said: "It is long past time for global financial institutions to strengthen their approach to financing projects that affect our environment, climate, and the rights of Indigenous Peoples. The language of corporate social responsibility has been part of our vernacular for years, but we have yet to see lofty goals grounded in meaningful action. The member banks of the Equator Principles Association have a choice. They can demonstrate real leadership and live up to our shared obligations to our environment and fellow human beings, or they can choose not to act and reveal that they have no genuine regard for principles. I hope they choose to exercise leadership and show us that the financial sector can be a force for significant positive change. As we see and feel the impacts of climate change, it is clear that the Equator Principles have failed to hold banks to standards that adequately account for their role in funding the climate crisis and the continued violation of Indigenous Peoples’ rights. If they don’t take bold action today, these financial institutions will continue to find themselves confronted by those of us who care for the planet and our Indigenous brothers and sisters, from the Arctic to the Amazon.”