Equator Principle 1
From Open Risk Manual
Equator Principle 1: Review and Categorisation
The Review and Categorisation principle [1] means that when a Project is proposed for financing, as part of internal environmental and social review and Due Diligence, the firm will categorise the Project based on the magnitude of potential environmental and social risks and impacts (ESG Risks), including those related to Human Rights, climate change, and biodiversity.
This categorisation is based on the International Finance Corporation’s (IFC) environmental and social categorisation process[2]
The categories are:
- Category A Project - Projects with potential significant adverse environmental and social risks and/or impacts that are diverse, irreversible or unprecedented;
- Category B Project - Projects with potential limited adverse environmental and social risks and/or impacts that are few in number, generally site-specific, largely reversible and readily addressed through mitigation measures; and
- Category C Project - Projects with minimal or no adverse environmental and social risks and/or impacts.
The required environmental and social due diligence is commensurate with the nature, scale and stage of the Project, and with the categorised level of environmental and social risks and impacts.
