Upon the invitation from the Equator Principles Association, IB’s Legal and Compliance Department dispatched personnel to attend the “Seminar on the Strategic Planning of the Equator Principles for the Next Five Years” organized by the association and held on December 1st to 3rd, 2010. The sessions lasted for three days, including two days of discussions concerning the strategic planning of the Equator Principles for the next five years, and a half-day bilateral meeting between the financial institutions following the Equator Principles and the International Finance Corporation (IFC) on the direction of future relationships and cooperation. Altogether there are 18 financial institutions following the Equator Principles that attended the meeting; Barclays Bank, BNP Paribas, Citibank, Calyon Bank, Mizuho Corporate Bank, Societe Generale Bank, The Standard Bank of South Africa, Westdeutsche Landesbank and IB, as well as the consulting agency for the strategic planning of the Equator Principles – ERM (Environmental Resources Management) and its independent consultants, Secretariat of the Equator Principles and International Finance Corporation (IFC).

As the “Gold Standard” for the management of environmental and social risks in international project financing, the Equator Principles have been applied over the past seven years. Following the major changes that have occurred in the international economic situation, the financial crisis, climate change and emerging markets, etc, only if the Equator Principles are kept inline with the times can its position as the “Gold Standard” be ensured. Therefore, based on the decision made by the 2009 Equator Principles Congress, the Equator Principles Advisory Committee (the committee appointed by the Equator Principles Association for the administration of the association) organized a seminar on the “Five-year Strategic Planning for the Equator Principles”, and through competitive bidding, the committee finally chose the world renowned environment resources consulting agency - ERM and its independent consultants for this strategic planning. The seminar held in Beijing is just one part of the strategic planning process.

At the conference, all participating parties had intensive discussions concerning the following issues: the internal administration model, transparency, accountability mechanisms and the appropriate implementation of the Equator Principles, as well as the Equator Principles’ scope of applicable products, disparity, member relations between Financial Institutions, and the relationship direction and cooperation between the Equator Principles and the IFC. Of the Issues discussed: whether it is proper to extend the disclosure scope to the applicable projects of the Equator Principles, to set up an accountability mechanism for the implementation effects of the Equator Principles, to cover climate change in the scope of the Equator Principles, whether the environmental and social standards of OECD countries with high incomes are definitely higher than the performance criteria and industrial guide of the IFC, and whether it is proper to increase the discourse power of the Equator Principles Financial Institutions within emerging markets in the Equator Principles Association, etc, were all hot topics of the discussions.

As the first Equator bank in China, IB is the only Chinese-funded bank that was invited to attend the seminar. Starting with China’s special national situation and the bank’s strategic concepts for sustainable development, IB introduced to all participating parties its gains and perplexities during the process of implementing the Equator Principles and the green credit policies of China. In particular the important role played by the “environmental protection blacklist” system for upgrading the capacity of the banks to identify environmental and social risks. IB also expressed its idea that the Equator Principles should increase the participation right and discourse power of financial institutions in emerging market economies. On that issue, both the Chairman-in-office of the Equator Principles Advisory Committee and the consulting agency indicated that they would further consider the universality and operability of the established standards of the Equator Principles, so as to make the principles a management tool for more financial institutions.

Based on the consensus reached in the seminar, the final report concerning the five-year strategic planning for the Equator Principles will be announced late January 2011. After which, the seminar will set about to discussing the revisions of new Equator Principles based on the analysis and conclusions of this report, and shed some light in reference to the modifications of new performance criteria disclosed by IFC in May 2011.