The Guidance Note aims to support Equator Principles Financial Institutions navigating the environmental and social due diligence process.

By James R. Barrett, Joshua W. Marnitz, and Malorie R. Medellin

In July 2022, the Equator Principles Association published a Guidance Note on how to apply the latest iteration of the Equator Principles (EP), EP4, during the Environmental and Social Due Diligence (ESDD) process. In particular, the Guidance Note addresses the scope of work and terms of reference for Independent Environmental and Social Consultants (IESCs) undertaking ESDD on behalf of Equator Principles Financial Institutions (EPFIs) under EP4, including the appropriate scope for the development of an EP4-compliant Environmental and Social Impact Assessment (ESIA).

The Guidance Note is significant because it addresses the changes to the pre-financial close ESDD required to be undertaken by IESCs under EP4, including with respect to projects located in Designated Countries that are no longer “deemed in compliance” with the Equator Principles solely by virtue of satisfying host country law. For information on the transition to EP4 and our analysis of its implications for projects in Designated Countries, see this December 2019 blog post, June 2020 Client Alert, and December 2020 Client Alert.

This blog post summarizes key elements of the Guidance Note for project lenders and sponsors to consider.

 National Agriculture Policy: Inflation Reduction Act Signed Into Law
On August 16, 2022, President Joe Biden signed into law H.R.5376, known as the “Inflation Reduction Act of 2022,” which appropriates $750 billion through 2031 for numerous federal programs, prioritizing renewable energy, climate, and healthcare initiatives.  The Act allocates approximately $38 billion for agriculture…

MOSS and glass globes

On August 11, 2022, the Climate and Resiliency (EX) Task Force (“C&R Task Force”) and the Special (EX) Committee on Race and Insurance (“R&I Committee”) met at the Summer 2022 National Meeting of the National Association of Insurance Commissioners (“NAIC”). While the C&R Task Force and R&I Committee did not…

An August 12, 2022 letter to the Supreme Court – signed onto by more than a dozen leading CEQA attorneys not representing parties to the action or other clients – has requested the Court to modify its August 1, 2022 majority opinion in County of Butte v. Dept. of Water Resources, Supreme Court Case No. S258574 to correct an error in one of the opinion’s background statements concerning a basic principle of CEQA law.  (The error was pointed out in my August 7, 2022 post on the case, which can be found here.)

The call highlights the challenges in developing alignment between global ESG reporting standards.

By Paul A. Davies, Sarah Fortt, Betty M. Huber, Michael D. Green, and James Bee

The European Central Bank (ECB) and the International Monetary Fund (IMF), two of the world’s leading public financial institutions have stressed the importance of consistency in global ESG-disclosure standards in a public message to one of the pre-eminent global standards setters. The call reflects a key challenge inherent in developing a set of ESG-disclosure standards that satisfy all stakeholders, while regulatory developments in this area continue to evolve rapidly worldwide.

Yesterday, President Biden signed the Inflation Reduction Act, creating a law that contains the most significant climate-related incentives in U.S. history. In the few short weeks since the bill was introduced in the Senate, a flurry of economic activity has already begun, with entities already beginning to align their business practices to the incentives laid…