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The Equator Principles : A Brief Overview

Dalmore Boys Club Spot The Ball
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Anyone remember spot the ball competitions? A strange photo of football action had the ball removed and you had to place an X where you thought the ball was. The winner won something, possibly cash.

Talking about business sustainability without mentioning money is a bit like a spot the ball competition. You know it’s there, an essential part of what’s going on, but spotting it can be very difficult indeed.

This is where the Equator Principles (EP) come in; a set of benchmarks put together to bring a sense of sustainability to business financing.

Governance of the Principles
The initiative was created in 2003 by the leading banks of the day, including Barclays, Citibank and ABN Amro. It uses the policies of the World Bank and the International Finance Corporation (IFC) as its foundation.

They apply to all projects which financial institutions may engage in with financing of over $10m. This includes both direct lending by the banks and financial consultancy.

In addition, the working groups which govern the principles are not wholly focussed upon the banks. They include representatives of NGOs, Socially Responsible Investment analysts and the banks’ client base.

Inevitably this means that the banks and their clients complain that the principles go too far while the NGOs complain that they don’t go far enough.

This is good and it is heartening to see both sides engaging with one another and feeling able to air their views freely.

Equator Principles Homepage

The Equator Principles Themselves
There are Ten Principles. Any institution signing up to them commits to ensuring any project it is involved in with a spend of over $10m will conform to these principles.

They are relatively simple and straightforward and define the standards, management systems, consultations and monitoring which the bank should require of the client.

These provide a clear pathway for any institution wishing to improve the sustainability of its activities. These steps are underpinned by policies from the IFC and World Bank which provide the real meat.

For instance, the principles embrace both the IFC’s Eight Performance Standards on Sustainability, ranging from Cultural Heritage to Pollution, and the World Bank’s 41 industry specific Environment, Health and Safety guidelines.

ABN Amro
Equator Principles Figures

Transparency and The Equator Principles
When the EP was first launched there was one major criticism which was levelled at it: transparency. Much like the UN Global Compact, in it had placed more emphasis on signing up institutions than on monitoring their commitment.

To try and rectify this, the principles were updated in 2006 to include a tenth principle to which requires institutions to report at least once a year upon their activities under the principles.

As a minimum this requires banks to report the number of projects they have been involved in. The associated guidance notes encourage institutions to break the information down further, for instance by country or sector.

Detailed figures, such as those provided by ABN Amro, give a tiny glimpse into which projects a bank has been involved in. However this should be only the start if the banks’ disclosures.

For example: what about the bank’s governance? Is the EP included as a standard part of staff training, as appropriate? How will a bank monitor EP compliance and how will it censure a client if they fall out of compliance?

The Equator Principles Should Lead Finance Sustainability
There is no doubt that the EP acts as a force for good within the banking industry.

In the past year its membership has grown by nearly 20%, includes a quarter of the top investment banks in the world and has recently embraced Industrial Bank Co, one of the largest banks in China.

However, having a ball is only the first part of a good game of football. The rest of the sport is made up of robust rules and regulations to ensure one side or another isn’t unduly favoured.

If the quality of the benchmark’s disclosure requirements isn’t improved the EP could encourage accusations of being a vehicle for greenwashers.

This would be a shame because finance is undoubtedly modern society’s main driver. As such the EP should be a leader, not a follower, in ensuring a sustainable economy is built.

9 in 10 Emails are Spam Says Cisco Annual Security Report

Each year, Cisco publishes its annual security report.  This year’s report tells us that 90% (or nearly 200 billion) of all the email messages sent each day are spam.  Next time your leadership comes to you and asks you to put together a marketing or branding email campaign, and you tell them to invest in measures to ensure your email is not diverted to recipients’ spam folders, but to save money, they say no, show them this report.  Every step you can take to ensure your email messages get to the recipients’ inboxes are essential to your campaign’s overall success.

Perhaps the biggest challenge of creating a successful email campaign isn’t getting people to open your message and follow your call to action, but making sure they get to see it sitting in their inboxes.  Even the most compelling title for your email doesn’t help if consumers never see it.  At the very least, an email authentication program is critical.  While not full-proof, it certainly increases the chances for your email to make it to its final destination correctly. [Read more…] about 9 in 10 Emails are Spam Says Cisco Annual Security Report

11 Phrases That Destroy Brand Innovation

We’ve all sat through meetings where nothing gets done.  For one reason or another, your team is tasked to come up with innovative new brand programs, but one idea after another is shot down. 

Take a look at the 11 phrases that destroy brand innovation below, then ask yourself if you or someone on your team is guilty of saying one (or more) of them.  If so, it’s time to adjust your thinking cap with an eye toward innovation and away from negativity.

1. We tried that already.

This is a big idea killer.  It’s natural over the lifespan of a business that ideas will resurface.  Just because an idea didn’t work in the past, doesn’t mean it can’t be retooled and be a big success in the future.  Consider Apple which was failing in the 1990s only to revive its brand and product line to become a market share threat to Microsoft.  What if Steve Jobs followed the, “we tried that already,” line of thinking?  Would the new Macbook, iPhone or iPod be available today? [Read more…] about 11 Phrases That Destroy Brand Innovation

Branded Domain Name Extensions are Coming with a Big Price Tag

Branded domain names could be available as early as 2009 through ICANN.  There will be financial and technical requirements that must be met by anyone applying for their own top-level domain.  In fact, it’s being speculated that these new domains could cost at least $100,000.  Instead of .com or .org and so on, you might start seeing websites with branded domains such as .McDonalds or .Microsoft by 2010.

When you think about it, a $100,000 price tag is nothing in comparison to the brand value that a branded domain offers.  It seems like a simple decision for companies to make – invest in your branded domain ASAP! [Read more…] about Branded Domain Name Extensions are Coming with a Big Price Tag

Is Your Brand Ready for Mobile Advertising?

“Mobile Ad Spending Set to Soar”

That’s the headline from an article from eMarketer last week.  According to a study by Strategy Analytics, brands across the globe are prepared to invest more than double what they spent in 2008 on mobile advertising in 2009 – from $1.0 billion in 2008 to $2.4 billion in 2009.  Is your brand ready for the ad spending shift?

The vast majority of that money is expected to be invested in mobile message advertising with much smaller sums invested in mobile search advertising and mobile display advertising. [Read more…] about Is Your Brand Ready for Mobile Advertising?

Branding and Disaster Planning

Most companies have a disaster plan in place that gives step-by-step instructions for all employees to follow in case something terrible happens, such as a flood at the headquarters location, loss of power for several days, and more.  Whatever the disaster may be (and let’s hope one never occurs), all employees are given a copy of the disaster plan instructions and told to bring it home and keep it in a safe place.

Business disaster plans are one thing, but what about brand disaster plans?  I’m thinking of disasters that can affect brands in all industries.  For example, consider the poisoned Tylenol incident in the United States in the 1980s.  More recently, toys manufactured with lead paint and foods that carry e-coli and other bacteria have made it to consumers’ hands bringing far more than negative publicity to the companies behind those brands.  While some of these brand disasters are bigger than others, they can all still be called disasters of some sort. 

That leads me to my question.  Do you have a disaster plan for your brand?  You never know what might happen in today’s world.  There are so many external forces at work in a global economy that developing a brand disaster plan isn’t that unusual of an idea.  What would you do if something terrible happened to your brand?  Could your company survive a branding disaster?  Make sure it can by planning for the worst now.

Image: Flickr