Equator Principles

ESG - Environmental, social and governance

In October 2007, EDC joined a growing list of international financial institutions committed to the Equator Principles, a financial industry benchmark for the determination, assessment and management of social and environmental risk in project financing.

Prior to adopting the Equator Principles, and since 2003, EDC has also been applying the Organisation of Economic Co-Operation and Development’s Common Approaches on the Environment, which binds export credit agencies to specific environmental and social review practices. EDC views the Equator Principles as a complement to the Common Approaches, and enables EDC to bridge the leading practices of both ECAs and commercial financial institutions. EDC’s other commitments to assessing projects is cemented in its Environmental and Social Risk Management Policy Framework and the EDC Environmental and Social Review Directive (ESRD). The ESRD sets out the process by which EDC will assess the environmental and social impacts (and mitigation measures) of a project, and is a legally-binding requirement for EDC under the laws of Canada.

The Equator Principles, the Common Approaches, and the ESRD are aligned in the requirement for projects to meet the elements of the same international standards, namely the International Finance Corporation’s Performance Standards on Social and Environmental Sustainability and sector-specific Environmental, Health, and Safety Guidelines. By aligning these requirements, clients of ECAs and commercial financial institutions benefit from meeting the same standards when undertaking environmental and social impact assessments.

Further detail on EDC’s project review process is described in Understanding EDC’s Project Review Process.

EDC’s implementation of the Equator Principles

Dedicated resources

EDC has a dedicated team of environmental and social risk specialists, tasked with implementing EDC’s environmental and social review processes and procedures, including conducting reviews under the Equator Principles. The ESG Advisory team consists of environmental and social advisors, reporting to the ESG Advisory Directors and the Vice-President of ESG Advisory. With different backgrounds including environmental science, biology, engineering, business, and international development, the team draws on a breadth of experience and knowledge relevant to the environmental and social risk assessment field.

Integration of Environmental and Social Review

Projects are examined by ESG Advisory for potential adverse environmental and social impacts.

Initially, EDC has various forums in place including team alignment meetings, huddles, and a triaging committee, that help identify deal related issues. At this point in time, ESG Advisory then looks for areas that may not be aligned with our internal policies on human rights, environmental and social responsibility. Depending on the degree to which projects measure up to the internationally recognized standards noted above, we will either engage project sponsors in further dialogue, discuss ways to deal with any serious issues, or, if gaps cannot be addressed, we decline the project outright.

Should we proceed to the next stage, EDC takes an in-depth look at the project design and evaluates the Environmental and Social Impact Assessment provided by the project developer/sponsor. Information requirements and the depth of EDC’s review are linked to the project categorization: Category A, B or C. In some cases, a lender’s group, of which EDC is a member, hires a number of specialized advisors to assist with a more detailed review. An independent environmental and social expert will provide unbiased input about the project’s potential impacts, adequacy of the mitigation measures and the project’s ability to meet international standards. Transactions supporting projects are reviewed by senior leadership during the due diligence process prior to signing of the loan.

ESG Advisory also ensures the project developer/sponsor formulates an environmental and social action plan. The plan will describe and prioritize time-limited commitments to complete any additional measures that the project will satisfy EDC and that it has fully met the requirements of the IFC Performance Standards. If the outcome of this stage is favourable, the environmental and social review must be authorized by EDC's President. After the loan agreement is signed, EDC continues to monitor the project for compliance.

For a list of transactions that underwent a review under the Equator Principles, see table below.​

Equator Principles transactions reaching financial close during 2022*

Three Project Finance transactions (PF) and three Project-Related Corporate Loan (PRCL) subject to the Equator Principles reached financial close during 2022.

​Project Name ​Project Description Sector Region Project in Designated Country Project Finance (PF) or Project-Related Corporate Loan (PRCL) Independent Review Performed International Standards Applied
Category B Projects​
Walla Walla Solar Farm Construction of a new 300MWac solar farm in Australia. Power Asia Pacific
Yes PF No Host Country Standards 
Sydney Metro Western Sydney Airport (SSTOM PPP Project) Financing, design, construction, operation and maintenance of the Sydney Metro Western Sydney Airport, Stations, Systems, Trains, Operations and Maintenance PPP Project. Infrastructure Asia Pacific
Yes PF Yes Host Country Standards 
Albright Gas Processing Facility Construction of a 15.7 hectare greenfield sour gas processing facility in Alberta, Canada. The primary purpose of the facility is to separate and remove acid gas (hydrogen sulfide) from raw sour natural gas. Oil and Gas Americas
Yes PRCL No Host Country Standards 
NAMCO Relocation Construction and relocation of a rare earth materials manufacturing facility in Zibo, China. Other Asia Pacific (China) No PRCL Yes IFC Performance Standards
Project Fuentes The Project consists of the operation and construction of seven photovoltaic (PV) generation parks as well as associated evacuation infrastructure including approximately 25km of 220kv overhead transmission lines. Power Europe
Yes PF No Host Country Standards
Category C Projects​ ​ ​ ​ ​ ​
IPPL - Phase 4 expansion/modernization Phase 4 expansion and modernization (including an Effluent Treatment Plant and a Water Use Reduction Facility) of the Irving's brownfield pulp mill in New Brunswick Other Americas(Canada) Yes PRCL No Host Country Standards

Host Country Standards, IFC Performance Standards

A summary of EDC’s assessment of the environmental and social impacts is prepared for all Category A projects. Those reviews can be found in this table.

1 Equator Principles III and IV requires reporting on transactions which have reached financial close.  For additional detail see ‘The Equator Principles, June 2013’, and ‘The Equator Principles, July 2020’. 

2 Designated Countries are those countries deemed to have robust environmental and social governance, legislation systems and institutional capacity designed to protect their people and the natural environment.

3 Project-Related Corporate Loans are corporate loans, made to business entities related to a single Project, either a new development or expansion, where the Known Use of Proceeds is related to a single Project. For additional detail see ‘The Equator Principles, June 2013’, and ‘The Equator Principles, July 2020’.

  ​Project Finance ​ ​Project-Related Corporate Loans ​
Sector ​Category B ​Category C ​Category B ​Category C
​Power 2 0 0 0
Oil & Gas 0 0 1 0
Infrastructure 1 0 0 0
Other 0 0 1 1
Totals 3 0 2 1
Americas 0 0 1 1
​Asia Pacific 2 0 1 0
Europe 1 0 0 0
​​Totals 3 0 2 1
​Country Designation        
​Designated Country 3 0 1 1
​Non-Designated Country 0 0 1 0
Totals 3 0 2 1
​Independent Review Performed        
Yes 1 0 1 0
No 2 0 1 1
Totals 3 0 2 1



Date modified: 2023-07-19