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    The Equator Principles: Evaluating the Exposure of Commercial Lenders to Socio-Environmental Risk

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    This paper investigates whether the mitigation framework established under the Equator Principles (EPs) is well-suited to address the manner in which socio-environmental risks may manifest within the context of non-recourse financing. The discussion begins with an examination of how the EPs allocate risk between the project lender and sponsor before analyzing how this framework has shifted the regulatory environment in the project finance sector. An exploration of the structural constraints of non-recourse financing will follow. The paper will conclude by assessing the ability of the EPs to effectively capture and mitigate the socio-environmental risk exposure of the project lender and suggest the incorporation of sociological theories of risk to address the identified gaps in the regulatory framework
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