How Nordea works with Equator Principles
Applying the Equator Principles
Nordea adopted The Equator Principles (EP) in 2007. Our analysts and other relevant personnel have been trained about Nordea’s internal EP process. Nordea follows the Equator Principles Manual (toolkit). The toolkit provides guidance on how to apply the EP in the day-to-day business.
The ten principles contained in the EP are organised into four workflow steps:
- Initial project review
- Project appraisal
- Project negotiation, commitment and monitoring
- External reporting.
Nordea evaluates the borrower’s capacity to adequately identify, prevent, mitigate and manage key social and environmental risks and impacts of the project based on documentation provided by the borrower, independent environmental and social consultants and in certain cases site visits.
The relevant business units in Wholesale Banking include CSR matters in the initial business selection discussions. The detailed project appraisal and internal EP reviews are carried out by EP reviewer within Wholesale Banking. The person has relevant education and broad working experience to support performing the task. The EP reviewer also proposes conditions related to environmental and social issues to loan agreements when necessary, participates in drafting the scope of work for independent consultants, communicates with other relevant project parties and monitors eg. the compliance to Equator Principles of projects. In the above tasks the EP reviewer co-operates with the rest of Nordea's deal team responsible for the financing of the transaction in question.
The EP reviewer presents the EP transactions to Nordea's EP Advisory Group (EPAG), which confirms the EP category and either supports or does not support the transaction based on EP compliance. The EPAG has 4-6 members who are senior managers from relevant business and risk management units. EPAG's statements are included in the evaluation of the relevant credit committee deciding on the financing of the transaction.
Nordea monitors (quarterly, semi-annually or annually, depending on type of project) the performance of all active projects in its portfolio to ensure compliance with environmental, social and other conditions. The borrower provides annual social and environmental monitoring reports that are usually verified by an independent expert. In case of any non-compliance, Nordea will determine an appropriate course of action together with the other lenders.
Below you can find tables containing breakdowns required by the EP III about Project Finance and Project-Related Corporate Loans, which reached financial close during the reporting period.