The “26th United Nations Climate Change Conference (COP26)”, held at Glasgow, UK on October 31, 2021, has been a critical meeting addressing climate change and the survival of the planet and human beings. To align the global efforts on fighting the looming threat of climate change and the 1.5°C target set by the Paris Climate Agree-ment, COP26 made sustainable finance its focus while most green financial institutions accepted the Equator Principles as the forerunner of climate issues.
Most existing project finances by local financial institutions are subjected to credit risk assessment by factors of "personal and corporate credit", "source of repayments" and "capacities of repayment". Facing the challenge of sustainable finances, eleven local financial institutions are observing the Equator Principles in assessing credit risks of their project finances instead. This study is aimed to find out the status of the said guidelines now and their differences and impacts when compared with existing financial systems.
This study employs Document Analysis, Case Study and Semi-Structured Inter-views to do the research.
This study found that the implementation of the Equator Principles by local finan-cial institutions would favor their efforts in meeting the “goal of 1.5°C” set by the Paris Climate Agreement.
