Equator principles - Corporate Responsibility

Equator principles

ANZ has adopted the Equator Principles, a set of voluntary standards designed to help banks identify and manage the social and environmental risks associated with the direct financing of large infrastructure projects like dams, mining and pipelines.

About the Equator Principles

The Equator Principles were established in association with the World Bank's International Finance Corporation (IFC) in 2003 and updated in 2006. They have been adopted by nearly 50 banks around the world, covering over 85% of the global project finance market.

The Equator Principles are designed to have effect primarily in countries with developing legal frameworks. They have particular relevance to ANZ as we are a financier of projects in emerging Asian economies.

By adopting the Equator Principles, ANZ has committed to fund only new projects that can be developed and operated according to sound social and environmental standards.

Find out more about the Equator Principles

What the Principles Require

A project within the scope of the Equator Principles is evaluated against comprehensive international performance standards on issues such as labour and working conditions, natural resource management, pollution prevention, impacts on Indigenous people, and community health and safety.

Projects with a high social or environmental impact must consult with local communities about concerns those communities may have, and prepare a management and monitoring plan describing the actions needed to adequately mitigate the social and environmental risks of the project.

ANZ is required under the Equator Principles to ensure these steps are carried out in collaboration with our clients.

The Principles do not prescribe for a bank what projects it should be involved in and those it should avoid, but rather ensure the bank makes an informed decision, by requiring a thorough analysis of potential social and environmental impacts.

Going Further

The Equator Principles are limited in their scope to project finance deals over $10 million in size. However, ANZ has decided to comply with the Principles for all project finance proposals, regardless of their size or geographic location.

Training our staff

Seventy five per cent of Project Finance employees in Melbourne, Sydney, Hong Kong and Singapore have received training from an external expert on how to apply the Equator Principles in practice.

Progress in 2008

In the year from October 2007 and September 2008, we reviewed 33 projects under the Equator Principles. Nine of these projects were not financed - four of these projects are still under consideration by project financiers and/or the project sponsor before a final decision is made. The remaining five did not proceed for a range of reasons, which may include the sponsor not being able to meet our funding conditions; the project not proceeding; or ANZ's bid not being accepted by the project sponsor.

Projects reviewed

Categories	Reviewed	Conformed to EP	Financed
Category A	3	2	0
Category B	16	16	14
Category C	14	14	10
Total	33	32	24

Location of projects

Categories	Projects in High Income OECD Countries	Projects Outside High Income OECD Countries
Category A	1	2
Category B	16	0
Category C	13	1
Total	30	3

Projects reviewed by sector

Categories	Natural resources	Infrastructure	Power & Utilities	Diversified
Category A	0	0	2	1
Category B	7	3	6	0
Category C	1	2	6	5
Total	8	5	14	6

The future

ANZ maintains its commitment to assess all large project finance proposals using the Equator Principles.