More about the Equator Principles
The evaluation of the projects
The project’s rating and possible classification for monitoring as sensitive are used to determine specific requirements with regard to the borrowers. These specifics may include consultants’ analyses and additional studies, mandated actions and including environmental and social imperatives as contractual obligations in loan agreements.
Analysis of social and environmental aspects is integrated into traditional procedures for dealing with funding requests, and is part of the discussion between salespeople and the risk department. Compliance with commitments is monitored during the structuring phase, and then at least yearly for the life of the credits.
However, final validation of these analyses (EP rating and classification for monitoring as sensitive) is made by the CERES Committee*, which replaced the EP Committee. It renders an opinion in advance of any credit being extended for projects classified A, or in the event of disagreement among those involved in analysing a file. Moreover, files classified A must be approved by the Counterparty Risk Committee.
*CERES Committee : The CERES Committee is headed by Crédit Agricole CIB's Compliance Head and gathers 5 voting members (or their representative):
- the president,
- one of the Natural resources, infrastructure and power business line's co-head,
- the Head of Risk and Permanent Control,
- the Head of the Sustainable Development mission in Crédit Agricole S.A., assisted by Crédit Agricole CIB's Head of Sustainable Development,
- the Head of Crédit Agricole S.A.'s Industrial and Sector Research unit.
The legal department and the communications direction are also represented in this committee.
Teams and controlling bodies within Crédit Agrciole CIB
Crédit Agricole CIB has developed a true sustainable development culture by making operational project finance teams more accountable. A number of teams and controlling bodies thus participate in project analysis and follow-up.
Project finance teams have primary responsibility for day-to-day compliance analyses (establishing rating matrices, contact with promoters and outside consultants, negotiating lending terms, etc.).
A network of local correspondents, made up of project finance operational staff, helps the account managers with complex files. Linking the sales force and control and validation bodies, this network ensures a first level of consistency in the application of the Equator Principles.
Crédit Agricole S.A.’s industry and sector research is carried out by consulting engineers who specialise in industrial sectors, contributing skills and understanding of complex technical and environmental problems. They give impartial, professional opinions, which are especially important for A files and those monitored as sensitive.
The CERES Committee is responsible for overseeing implementation of and compliance with the Equator Principles. Born in 2005 under the Equator Principles Committee name, it validates EP ratings after auditing industry and sector studies. It issues recommendations for A files prior to credit decisions. The CERES Committee also keeps abreast of in the progress of A files and those monitored as sensitive.
A Coordination unit, based in Paris, manages practical implementation of this organisation (tools, training, procedures, etc.) with the assistance of the Head of Sustainable Development, and provides support to the local correspondent network.
The Head of Sustainable Development provides assistance in the most complex cases, ensures that methodologies and tools are used consistently. In liaison with the Coordination Unit, it represents Crédit Agricole CIB in dealing with the Equator Banks, the IFC and civil society.