After an evaluation of our membership to the Equator Principles (EPs), FMO has decided to discontinue its membership to the Equator Principles Association. The governance and legal changes effective as of January 1, 2024, mandating members to become signatories, marked a logical moment for FMO to reassess our ongoing commitment to the EP.
FMO has been a member to the EPs since 2005 and has seen the EP grow to become an international standard in E&S risk management, as the expansion to a membership base of 140 EPFI illustrates. Our decision takes into account the evolving landscape of the EU and national regulations, which are increasingly covering the scope of voluntary commitments. Additionally, our increased engagement and formal harmonization efforts with the European Development Finance Institutions (EDFIs) have significantly factored into this strategic choice. We believe that focusing on these harmonization efforts will enable us to be more effective in making a more significant impact in the markets where we operate and leverage our influence within this like-minded group for a collective, more substantial impact.
Having been a longstanding member of the EPs since its early years, we recognize the great benefits the Association offers to financial sector in terms of accessing an extensive network of financial institutions and utilizing the EPs as the leading standard for environmental and social (E&S) due diligence in project finance. Also, the EPs value in bringing the E&S risk management especially to commercial banks and harmonizing the approaches towards the matter among the various FIs around the world is considerable. For this reason, we remain committed to promote the EP within our FI clients and prospects. FMO will also remain connected to the EPA (and its successor) by sharing best practices and maintaining an active dialogue.
It's crucial to note that despite delisting from the EPs, our adoption and application of IFC PS and a human rights lens to higher-risk deals, irrespective of project finance or corporate finance, and our commitments to PRI and PRB, demonstrate our commitment and dedication to maintaining high standards in E&S risk management.