Implementing International Good Practice Standards: Pragmatism Versus Philosophy

Mainstreaming environmental and social considerations is something people have been working on for many years, and still are. For economists, the environment was considered an externality—if you cannot quantify it, you cannot incorporate it into your economic model. This is an ongoing problem, though tremendous strides have been made. John Dixon at the World Bank was one of the first to tackle this divide. Two years prior to the creation of the original Equator Principles, the four founding banks—Citibank, Barclays, WestLB and ABN Amro, each experienced a reputational crisis fomented by NGOs that led them to found what later was to become the Equator Principles. The four banks—Citi, Barclays ABN Amro and West LB—eventually got together, and this was the catalyst for the Equator Principles. They discussed that they needed some sort of environmental and social policy framework for project finance lending across the board. Although it was a cautious approach, it was a brave move. It took two more years of lobbying to recruit another six banks to have a critical mass of 10 for the original launch in June 2003. It has taken another 10 years to exceed 75 members.