Focus on the Equator Principles**
Since their adoption in 2007, Société Générale is an active Member of the Equator Principles, being in particular a Steering Committee member and participating to various working groups.
Internal processes for their application are well in place, and it is in particular on that experience that Société Générale is building for the deployment of FINETHIC project, which scope goes well beyond Project Finance.
In 2010, a total of 71 projects were screened and categorized as per the Equator Principles requirements, including for advisory mandates.*
These projects covered all categories and all regional areas of the world, including non High Income OECD countries where Equator Principles entail the application of IFC Environmental and social standards.
The Environmental and Social (E&S) review process takes into account the level of potential risk and the location of a project. The key steps of the Equator Principles (EP) implementation process in the bank are as follows:
- The categorization of a project is the first step in the E&S assessment (A for high potential risk, B for medium and C for low).
- The definition of E&S requirements which vary according to the categorization of a project. The relevant information on the E&S aspects of a project is collected from the client. For projects categorized as “A” (and the case may be for “B”), an independent E&S expert is required to review the submitted E&S documentation. Where necessary, an action plan is prepared based on this review outlining the measures needed to minimize and mitigate potential E&S risks. This action plan is then integrated into the loan documentation along with the other relevant clauses which legally bind the client to comply with all applicable local and international E&S laws and regulations. In cases of non-compliance with the required standards, Société Générale may decide to withdraw from the financing.
- The review of the E&S documentation is carried out by the environmental team according to the level of risk of a project. Additional documentation may be requested from the client and/or independent E&S expert. In addition to the review by the environmental team, the bank's Risk department and its team of internal consultants are also on hand to provide advice on the technical and environmental aspects of the financing.
- The approval process implies finally for category A and B projects a memo outlining key E&S aspects as well as a positive opinion of the compliance to Equator Principles.
** in line with our Global Compact commitments
NOTES
- Equator Principles
- Environmental and Social