Equator Principles: Bridging the Gap between Economics and Ethics?
Business and Society Review 120(2) (2015); 205-243
33 Pages Posted: 30 Jan 2015 Last revised: 7 Jul 2015
Date Written: January 29, 2015
The hypothetical conflict between self-interest, corporate interest and the common good is one of the hottest debated issues in business ethics. This paper focuses on a particular CSR-approach within the field of sustainable (project) finance which has the potential(!) – given that certain reform measures are adopted – to overcome the alleged trade-off between self-interest and the common good. The approach is labeled as the Equator Principles framework which celebrated its tenth anniversary and the formal launch of the third generation of the EPs (EP III) in 2013. The paper shows how companies can theoretically be both profitable and socio-environmentally responsible by adhering to the EPs. The paper proceeds as follows: Before moving on to the EPs, section 2 defines the key terms self-interest and common good. Section 3, then, analyzes the EPs from a business ethics perspective. Section 4 shows how the EPs can help solving the potential trade-off between self-interest and the common good – provided that the EPs are substantially revised. These required reform steps are discussed in section 5. The paper ends with a summary of the main findings.
Keywords: Equator Principles, sustainable finance, corporate social responsibility, self-interest, common good.
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