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Big banks swipe left on Equator Principles: Eco-friendly or eco-fickle?


big banks and equator principles, financial news

The recent exodus of JPMorgan, Citi, Bank of America, and Wells Fargo from the Equator Principles has sent ripples through the banking world. These principles, created in 2003 with the noble intention of safeguarding the environment and society from the potentially harmful impacts of large infrastructure projects, apparently aren't quite as enticing as they used to be for these banking giants.


It's almost as if the allure of being part of a global environmental initiative has lost its shine, or perhaps it's just a case of commitment issues.


In a classic move of 'it's not you, it's me,' representatives from these banks insist that they're still very much committed to the ideals of the Equator Principles, just not in an official capacity.



It seems that being part of a formal environmental framework is so last season. This trend of backing away from corporate environmental initiatives has gained popularity, especially with U.S. Republican politicians playfully suggesting that such involvement could be a no-no under antitrust laws.


Who knew that saving the planet could be so legally complicated?


The Equator Principles themselves, a set of 10 commandments for eco-friendly project financing, range from conducting thorough due diligence to setting up complaint boxes (grievance mechanisms).


Citi and Wells Fargo, in a letter to the Equator Principles, mentioned something about organizational restructuring as the reason for their breakup. It's the classic 'it's not you, it's me' situation. They've assured everyone that they will still consider these principles, but on a more casual, non-committal basis.



Wells Fargo has charmingly stated that they will include the Equator Principles in their decision-making, but only when they feel like it's appropriate.


Meanwhile, Citi has sent an email from the heart, professing their undying commitment to assessing environmental and social risks in their projects, but, you know, just not under the Equator Principles' banner.


JPMorgan, in a move of true independence, declared that their in-house experts and processes are so top-notch that formal membership in the Equator Principles is practically redundant.


It’s like saying, “Thanks, but we can handle this environmental and social risk stuff on our own.” Yet, they graciously concede to keep their standards in line with the principles, out of the goodness of their hearts.


Bank of America, not to be outdone, has romantically vowed to keep the spirit of the Equator Principles alive within their risk policy framework. They emphasize their freedom to make independent decisions about clients and transactions, because who needs guidelines when you have intuition?



The spokesperson for the Equator Principles, possibly nursing a broken heart, declined to comment further on this dramatic turn of events. Meanwhile, Richard Brooks from Stand.Earth likened the banks' departure to ditching a set of minimum standards they themselves helped create. It's like a chef refusing to eat their own cooking.


The irony is not lost on those observing this saga unfold, watching banks tiptoe away from their own brainchild, presumably in search of newer, less binding environmental adventures.


06.03.2024



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