UKEF's implementation of the Equator Principles (2016)
Published 4 November 2016
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1. UKEF as an Equator Principles Financial Institution
UK Export Finance (UKEF) adopted the Equator Principles (EPs) on 31 March 2016, joining over 80 other financial institutions in applying this global framework for environmental, social and human rights (ESHR) decision-making in financing projects. UKEF continues to follow the OECD Recommendation on Common Approaches for Officially Supported Export Credits and Environmental and Social Due Diligence (OECD Common Approaches), currently dated 07 April 2016.
This note outlines the activities UKEF has completed in order to update its policies and internal processes and implement the EPs since their adoption and up until 31 October 2016. Over this period no financing falling under the scope of the EPs has reached financial close.
UKEF has updated its policy and practice on Environmental, Social and Human Rights due diligence and monitoring to incorporate the requirements of both the OECD Common Approaches, and the EPs. The policy sets out how UKEF implements the EPs in tandem with the OECD Common Approaches during pre-issue stages (scoping, screening, due diligence review), these aspects satisfy Equator Principles 1 – 8, and for post-issue monitoring, to satisfy Equator Principle 9. This reporting of our progress to date forms part of UKEF’s obligations under Equator Principle 10 (Reporting and Transparency) and as articulated in Annex B of the EPs.
2. Role of the Environmental Advisory Unit
UKEF’s Environmental Advisory Unit (EAU) is responsible for carrying out the implementation of UKEF ESHR policy. The EAU has updated its internal processes and management systems to ensure the EAU’s responsibilities are conducted with reference to the OECD Common Approaches and the EPs.
The EAU’s staff are professionally qualified to directly undertake and/or manage the necessary ESHR due diligence and liaise with project sponsors and/or exporters and UKEF decision-makers. The EAU has five permanent staff and reports directly to the Head of Business Group and the Chief Executive.
Since adopting the EP, the EAU has provided, and continues to provide, internal training to UKEF’s Business Group (including underwriters), and wider staff, to raise awareness of the requirements of the OECD Common Approaches and EPs and general ESHR risk management.