The Equator Principle, A Risk Management Framework Designed And Adopted For Financial Institutions

1951 Words Oct 14th, 2014 8 Pages
The equator principle, a risk management framework designed and adopted for financial institutions that requires those who are bound by this code to carefully measure, determine, and think through the environmental and social implications of a project and make the proper procedures to ensure that debtor it is loaning the money to exercise a pretty high standard of care before financing the said project. The equator principle sets a minimum standard of due diligence to support responsible decision making for these financial institutions before making a loan.
Currently, there are 80 financial institutions who have adopted the equator principle. Among these financial institutions is the third largest bank by market capitalisation in Australia “The Australia and New Zealand Banking Group Limited”, commonly called as ANZ.
Other than the equator principle ANZ also uses a variety of standards, guidelines, and indices such as the Dow Jones Sustainability Index, Global Reporting Initiative, Un Global Compact, FTSE4Good, London Benchmarking Group, and CDP all of which are renowned for setting the best standard of sustainability in the financial industry.
ANZ Bank’s adoption of the best standards for sustainable practices in the financial industry has given the banking giant an attractive and good reputation to the public eye, especially towards analysts, investors, and stakeholders. Which is why the latest news about the ANZ Bank’s contribution to the allegations on a sugar company…
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