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the equator principles

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The Equator Principles

The EPsStatistics
● The Equator Principles
The Equator Principles (EPs) serve as a common baseline and risk management framework for financial institutions to identify, assess, and manage environmental and social risks when financing projects.
● Equator Principles Adoption
Adopting the EPs is an important element of the sustainability risk management framework established by Taipei Fubon Commercial Bank (TFB). To further demonstrate its commitment to environmental protection and corporate social responsibility, TFB began planning its application to join the Equator Principles Association in July 2015 and officially became a member in December 2017.
Equator Principles Association
● Requirements for EP Compliance
TFB has amended its credit policies and related operating procedures to incorporate the EPs into its sustainability risk management framework. Credit applications subject to the EPs must be processed in accordance with the following procedures:
Step 1｜Categorization
Each credit application subject to the EPs must be classified into one of the following categories:
  • Category A: High-risk projects
    Projects with potential significant adverse environmental and social risks and/or impacts that are diverse, irreversible, or unprecedented.
  • Category B: Medium-risk projects
    Projects with potential limited adverse environmental and social risks and/or impacts that are few in number, generally site-specific, largely reversible, and readily addressed through mitigation measures.
  • Category C: Low-risk projects
    Projects with minimal or no adverse environmental and social risks and/or impacts.
The additional procedures listed below are required for Category A and Category B projects. Category C projects may be processed in accordance with standard credit procedures.
Step 2｜Additional Credit Assessment Requirements
For Category A and Category B projects, the following additional due diligence and document review requirements apply:
  • Environmental and social risk and/or impact assessments conducted by an independent third party acceptable to TFB.
  • On-site inspections.
  • Covenants regarding compliance with the EPs included in the relevant loan agreements.
  • Monitoring and reporting of environmental and social risk matters in accordance with the approved terms and conditions.
Step 3｜Credit Approval
The results of the environmental and social risk assessment for each credit application are taken into consideration during the credit approval process.
Step 4｜Additional Loan Agreement Requirements
For Category A and Category B projects, covenants regarding compliance with the EPs must be included in the relevant loan agreements.
Step 5｜Additional Credit Review Requirements
For Category A and Category B projects, environmental and social risk matters must be monitored and reviewed regularly in accordance with the EPs. Relevant information must also be disclosed in accordance with the EPs transparency requirements.
● Roles and Responsibilities for EP Compliance
To implement the guidelines and operating procedures established for EP compliance, the roles and responsibilities of TFB’s internal departments are presented below:
Roles and responsibilities for Equator Principles compliance
● Training on the Equator Principles

In July 2017, TFB engaged external consultants to support its application to join the Equator Principles Association. A project kick-off meeting was held to introduce the EPs and the implementation timeline to institutional banking units, credit officers, and other related departments.

During the process of incorporating the EPs into TFB’s credit policies and operating procedures, six cross-departmental meetings were held to assess the impact of EP implementation on the relevant departments.

In April 2018, TFB completed the amendments to its credit policies and operating procedures. Credit applications subject to the EPs are required to undergo environmental and social risk identification, assessment, categorization, review, and post-loan monitoring.

In May 2018, TFB conducted two large-scale internal training sessions for domestic and overseas institutional banking marketing units, credit officers, and other related departments. The sessions provided detailed explanations of the EP requirements and amended internal policies.

TFB will continue to organize relevant training programs to mitigate the adverse environmental and social impacts of major project financing and encourage clients to place greater emphasis on environmental protection and corporate social responsibility.

● The Independent Review Summary of the Equator Principles
In accordance with the requirements of the Equator Principles Association, TFB conducted an independent review of its EP-related management framework and operating procedures. The review background, objectives, methodology, scope, and conclusion are summarized below:
Review Background and Objectives
  • Review Background: Taipei Fubon Commercial Bank (hereinafter referred to as "the Bank") officially became a member of the Equator Principles Association in December 2017. In accordance with the Association’s requirements, member institutions are required to conduct an independent review every three years starting from 2024. The Bank assigned the Internal Audit Department to undertake this review, which was conducted from May 19, 2026, to June 8, 2026.
  • Review Objectives: To evaluate whether the Bank has effectively established and implemented systems and operational procedures in compliance with the Equator Principles, and to enhance the accuracy and consistency of the Bank’s implementation of the Equator Principles.
Review Methodology and Scope
  • Review Methodology: A sampling approach based on Multi-Criteria Decision Analysis (MCDA) was adopted to identify and prioritize cases with higher environmental and social risk impacts, in alignment with the risk-based review principle.
  • Review Scope: The review covered the period from December 2017 to April 2026. It included a sample of the top 30% of Equator Principles cases ranked by environmental and social risk, along with a concurrent sample of 10% of non-Equator Principles cases.
Review Conclusion

No material violations of the Equator Principles or the Bank’s internal regulations were identified during this review. The Bank has established a management framework for the Equator Principles and has carried out case evaluations, reviews, and information disclosures in accordance with the relevant requirements. Overall, the implementation is considered appropriate.

However, there remains room for improvement in certain operational processes, document retention practices, and the level of detail provided in information disclosures. It is recommended that the Bank continue to enhance the relevant procedures and control mechanisms to improve the overall quality of implementation.


Project Finance Advisory Services

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Power 0 4 2
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Non-designated Country 0 4 3
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Project-related Corporate Loans
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By Country Designation

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