Equator Principles reporting: factors influencing the quality of reports
by Olaf Weber
International Journal of Corporate Strategy and Social Responsibility (IJCSSR), Vol. 1, No. 2, 2017

Abstract: This study analyses the reporting of Equator Principles Financial Institutions (EPFI). The Equator Principles are a voluntary code of conduct, providing guidelines for assessing, managing, and reporting environmental and social impacts in project finance. The objective of the study is: 1) to understand, whether EPFIs follow the Equator Principles reporting guidelines; 2) to assess the quality of the mandatory reports of the EPFIs; 3) to analyse causes for differences in reporting. Because the Equator Principles are a voluntary code of conduct, or a so-called soft law, the research has been based on institutional theory. Our results suggest that though EPFIs follow the reporting guidelines, only about 5% disclose all the information required by the guidelines and consequently achieve the highest score with respect to their reporting quality. Furthermore, differences in reporting quality are mainly caused by the size of the EPFIs. The larger the EPFI with respect to its total assets the higher is the reporting quality. We conclude that further mechanisms, such as standardisation and assurance, are needed to guarantee transparent reporting of environmental and social project risks.

Online publication date: Wed, 24-May-2017

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