Description
This paper presents a longitudinal case study examining why and how commercial banks
sought to integrate sustainability issues into their project finance operations between 2003
and 2008. We study the evolution of a set of influential environmental and social risk management
guidelines for project finance – the Equator Principles (EP) – and the simultaneous
structuration of a field around these guidelines focused on the issue of socially accountable
project finance. The case is theoretically framed using Hoffman’s (1999) concept of an
issue-based field and associated conceptualisations of the role of internal and external
(social) movements in the structuration of these fields.
The structuration of issue-based ?elds: Social accountability,
social movements and the Equator Principles issue-based ?eld
Niamh O’Sullivan
a,1
, Brendan O’Dwyer
b,?
a
Sustainalytics and University of Amsterdam Business School, The Netherlands
b
University of Amsterdam Business School, Plantage Muidergracht 12, 1018 TV Amsterdam, The Netherlands
a r t i c l e i n f o
Article history:
Available online 29 April 2015
a b s t r a c t
This paper presents a longitudinal case study examining why and how commercial banks
sought to integrate sustainability issues into their project ?nance operations between 2003
and 2008. We study the evolution of a set of in?uential environmental and social risk man-
agement guidelines for project ?nance – the Equator Principles (EP) – and the simultaneous
structuration of a ?eld around these guidelines focused on the issue of socially accountable
project ?nance. The case is theoretically framed using Hoffman’s (1999) concept of an
issue-based ?eld and associated conceptualisations of the role of internal and external
(social) movements in the structuration of these ?elds. The structuration of the issue-based
?eld studied is shown to encompass a dynamic, contested process involving extensive
interactions between a non-governmental organization (NGO) movement and a commer-
cial bank movement. We unveil how the con?icting, collective rationales and actions of
both movements fuelled the structuration process and facilitated an evolution in the social
accountability of commercial banks. While prior work sees little potential for civil society
actors to engage with and move corporate social responsibility and reporting in a more
challenging direction, we reveal how the NGO movement evoked a progression in social
responsibility and reporting in a sector that had previously shown little inclination to
address its wider social accountability. Drawing on our case analysis, we theorize how
issue-based ?elds cohere and crystallise, particularly how they build an institutional
infrastructure based upon the infrastructure of the mature ?eld which they straddle and
which the relevant issue impacts upon.
Ó 2015 Elsevier Ltd. All rights reserved.
Introduction
In the wake of the 2008 ?nancial crisis, the US
Government’s Financial Crisis Inquiry Commission indi-
cated that one of its main causes was a collapse in account-
ability among some of the world’s largest ?nancial
institutions. The Commission concluded that many indus-
try leaders were lulled into taking unwarranted risks that
ended up having devastating social consequences
(Economist Intelligence Unit, 2012; Roberts & Jones,
2009). As a result, increased scrutiny of ?nancial institu-
tions’ social licence to operate emerged, leading to escalat-
ing interest in examining their social accountability
(Hopwood, 2009; McSweeney, 2009). While the ?nancial
crisis highlighted the adverse direct social impacts of cer-
tain ?nancial sector activities, the sector’s core lending
and investment practices have long been seen to have indi-
rect social (and environmental) consequences, particularly
with respect to decisions to lend to or invest in entities
whose operations may have damaging impacts on society
and/or the environment (Scholtens, 2006, 2009).
Although efforts to consider social and environmentalhttp://dx.doi.org/10.1016/j.aos.2015.03.008
0361-3682/Ó 2015 Elsevier Ltd. All rights reserved.
?
Corresponding author. Tel.: +31 2 525 4260.
E-mail addresses: [email protected] (N. O’Sullivan),
[email protected] (B. O’Dwyer).
1
Tel.: +31 20 205 0045.
Accounting, Organizations and Society 43 (2015) 33–55
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impacts within lending and investment practices existed
prior to the ?nancial crisis (Coulson & O’Sullivan, 2014;
Dejean, Gond, & Leca, 2004; Scholtens, 2006, 2009), we
are limited in our understanding of the dynamics of these
processes, such as why and how these processes emerged,
how actors within and outside the ?nancial sector inter-
acted and in?uenced these processes, and the nature and
extent of the institutional change they effected. In particu-
lar, we know little about the extent to which such change
processes advanced social accountability in the ?nancial
sector.
This study attends to these change dynamics, and their
effects. It investigates why and how commercial banks
began to address sustainability issues in their ‘project
?nance’
2
operations from 2003 onwards and how this was
catalysed by non-governmental organization (NGO) cam-
paigns promoting socially accountable ?nance. It further
examines the effects these processes had on the project
?nance ?eld and on commercial bank social accountability;
particularly the evolution in the nature of commercial bank
reporting on their environmental and social risk assessment
processes. Speci?cally, we present a longitudinal case study
examining the evolution and adoption of the Equator
Principles (EP), a suite of environmental and social risk man-
agement guidelines for commercial banks’ project ?nance
activities. The Principles represent one of the most signi?-
cant social accountability initiatives to have emerged within
?nancial markets in the past decade. We examine the role of
an NGO movement operating outside the mature project
?nance ?eld and the role of a commercial bank movement
from within this ?eld in the structuration of a separate,
but related, ?eld focused on the issue of socially accountable
?nance – what we term ‘‘the Equator Principles (EP) issue-
based ?eld’’.
3
We simultaneously study how this process
in?uenced how commercial banks adopting the Equator
Principles (termed Equator Principles Financial Institutions
(EPFIs)) addressed their social accountability.
4
The case is
theoretically framed using Hoffman’s (1999) concept of an
issue-based ?eld and associated conceptualisations of the
role of internal and external (social) movements in the
structuration of ?elds formed around key issues.
Our analysis unveils how the con?icting collective
rationales and actions of the NGO and Equator Principles
Financial Institution (EPFI) movements regarding the issue
of socially accountable project ?nance shaped the Equator
Principles (EP) issue-based ?eld structuration process and
an ensuing evolution in EPFI social accountability.
5
We
offer a nuanced understanding of the dynamic, political
and contested interactions between NGO and corporate
movements in the structuration of (sustainability-related)
issue-based ?elds, especially in ?nancial markets (see, King
& Pearce, 2010), and of how these interactions in?uence
the construction of ‘‘new categories and standards of
accountability’’ (King & Pearce, 2010, p.260). Drawing on
our analysis, we theorize how issue-based ?elds cohere
and crystallise, particularly how they evolve an institutional
infrastructure based upon the infrastructure of the existing
mature ?eld which they straddle, and which the issue
impacts upon.
We make a number of theoretical and empirical con-
tributions to the literature. First, the extant literature pro-
vides rich agentic accounts of ?eld structuration which
emphasise the interplay between the notions of institu-
tional entrepreneur, (collective) rationality, logics, theo-
rization, framing and diffusion, resource mobilization,
collective action, and social movements in dynamic pro-
cesses of ?eld evolution and change (see, Hardy &
Maguire, 2008; Schneiberg & Lounsbury, 2008; Wooten &
Hoffman, 2008). However, this literature has predomi-
nantly focused on mature and emerging organizational
?elds (e.g. Dejean et al., 2004; Ezzamel, Robson, &
Stapleton, 2012; Greenwood & Suddaby, 2006;
Lounsbury, 2002; Purdy & Gray, 2009; Suddaby, Cooper,
& Greenwood, 2007), with analyses of issue-based ?elds
(Hoffman, 1999), and in particular how and why issue-
based ?eld structuration unfolds, remaining largely
neglected. We contend that our focus on issue-based ?elds
is important as it allows for a better understanding of how
issues, in particular sustainability-related issues (in our
case, the issue of socially accountable ?nance), affect and
are affected by mature ?elds (here, the commercial bank
project ?nance ?eld), and of how separate ?elds can
develop around speci?c issues yet continue to in?uence,
and be in?uenced by the mature ?elds they impact on.
Given the prominence of sustainability issues in con-
temporary societies and markets and the prevalence of a
wide-range of issue-speci?c corporate sustainability prin-
ciples, standards and codes of conduct throughout these
contexts, we contend that it is necessary to analyse the
emergence of such phenomena in depth in order to better
comprehend how sustainability issues are in?ltrating
mature (corporate) ?elds and affecting corporate social
accountability processes. Our analysis extends Hoffman’s
(1999) study of how the issue of corporate environmental-
ism was interpreted and addressed by the US chemical
industry and his theorisation of how ?elds develop around
issues as opposed to markets or technologies. Moreover,
2
Project ?nance is a method of funding in which the lender looks
primarily to the revenues generated by a single project, both as the source
of repayment and as security for the exposure to default. It can involve the
?nancing of the construction of a new capital installation, or the re?nancing
of an existing installation, with or without improvements. The borrower is
usually a Special Purpose Entity (SPE) which is not permitted to perform
any function other than developing, owning and operating the ?nanced
installation. As a consequence, the repayment depends primarily on the
project’s cash ?ow and on the collateral value of the project’s assets
(Equator Principles II, 2006).
3
‘‘An organizational ?eld is composed of sets of institutions and
networks of organizations that together constitute a recognizable area of
life’’ (Maguire, Hardy, & Lawrence, 2004, p.657). An issue-based ?eld is
formed around an issue, as opposed to common technologies or industries,
and brings disparate groups together (Hoffman, 1999). We view ?eld
structuration as an on-going, iterative process between ?eld institutions/
structures and agency which is re?ected in the nature of the inter-
organizational infrastructure (common meaning, relational and operational
systems) that arises at ?eld level (Scott, 2008). We elaborate on these
notions in the theoretical framing in the next section.
4
Equator Principles Financial Institutions (EPFIs) are ?nancial institu-
tions that adopted the Equator Principles. EPFIs also encompass all of those
?nancial institutions that were the initiators and original developers of the
Equator Principles (who also went on to adopt the Equator Principles).
5
Please refer to Appendix A for a list of the acronyms used throughout
the paper.
34 N. O’Sullivan, B. O’Dwyer / Accounting, Organizations and Society 43 (2015) 33–55
we advance Hoffman’s (1999) conceptualisation of issue-
based ?elds, as we theorize how and why they evolve an
institutional infrastructure.
Second, we progress prior work exploring the
institutionalization processes surrounding corporate social
reporting and accountability (see, for example, Archel,
Husillos, & Spence, 2011; Bebbington, Kirk, & Larrinaga,
2012; Cooper & Owen, 2007; O’Sullivan & O’Dwyer,
2009). The case illustrates how environmental and social
risk assessment became a component part of credit risk
analysis in project ?nance, and how this risk assessment
process came to be reported on as part of a collective
(and individual) commercial bank effort to encourage
environmental and social due diligence and socially
responsible decision making. In particular, we show how
the EP issue-based ?eld structuration process initiated
and advanced the production of accounts of banks’ efforts
to categorise, quantify, monitor and avoid (where possible)
environmental and social risks. This advances our under-
standing of the impact of ?eld-level institutionalization
processes on the evolution of corporate social and environ-
mental reporting practices. We develop the ?ndings of
Archel et al. (2011) regarding the relationship dynamics
that transpire in the structuration of a ?eld focused on
improving corporate accountability by extending and
nuancing their insights into the role of activist stakehold-
ers such as NGO movements in the structuration of this
form of ?eld. While aspects of our analysis concur with
Archel et al.’s (2011) questioning of the potential for civil
society actors to engage with and move corporate social
responsibility and reporting in a more challenging direc-
tion (see also, Cooper & Owen, 2007), we temper their con-
clusions by unveiling how a set of civil society actors (in
the form of an NGO movement) evoked a progression in
social responsibility and reporting in a sector that had pre-
viously shown little inclination to address its wider social
accountability.
Third, by unveiling the role of NGO and Equator
Principles Financial Institution (EPFI) movements in the
Equator Principles issue-based ?eld structuration process,
we extend the literature on the effects of external and
internal movements on institutional change and ?eld
structuration (e.g. Fligstein, 1996; Hensman, 2003;
Lounsbury, Ventresca, & Hirsch, 2003; Van Wijk, Stam,
Elfrong, Zietsma, & Den hond, 2013). In particular, we
advance aspects of Van Wijk et al.’s (2013) study of the
relationship between external movements and ?eld
incumbents in ?eld structuration processes by providing
insights into how the nature of the issue fuelling move-
ment activity can in?uence these processes. Van Wijk
et al. (2013) suggest that the ambiguity of an issue may
contribute to more collaborative work between mature
?eld incumbents and less powerful external movements
in ?eld structuration. However, while we reveal some col-
laborative efforts between the NGO and Equator Principles
Financial Institution (EPFI) movements, we ?nd that the
newness or ambiguity of an issue (such as socially account-
able project ?nance) allows for a certain level of capture of
the issue by powerful ?eld incumbents who possess the
necessary resources to develop issue-based institutions
and practices which predominantly suit their preferred
rationale and logics. This accentuates the combative as
opposed to collaborative nature of the interactions
between mature ?eld incumbents and less powerful exter-
nal movements in ?eld structuration processes.
The remainder of the paper proceeds as follows. The
next section introduces the theoretical framing adopted
in the study. The research methods are subsequently out-
lined before a narrative of the case analysis is presented.
This narrative traces the Equator Principles (EP) issue-
based ?eld structuration process between 2003 and 2008,
emphasising the co-evolution of the ?eld structuration
process with advances in the social accountability of ?nan-
cial institutions adopting the Equator Principles. The paper
proceeds to discuss the case analysis in the context of the
theoretical framing and proposes a model of issue-based
?eld structuration before concluding with some recom-
mendations for future research.
Theoretical context
In order to frame our analysis of the structuration of the
Equator Principles (EP) issue-based ?eld, we mobilize
Hoffman’s (1999) conception of issue-based ?elds along-
side associated conceptualisations of the role of internal
and external (social) movements in the structuration of
such ?elds. This framing serves as a sensemaking device
to focus our analysis and help develop our understanding,
communication and theorisation of the issue-based ?eld
structuration process (Ahrens & Chapman, 2006). Below,
we develop this framing by elaborating on the notion of
issue-based ?elds and the role of collective sets of actors
in the structuration of such ?elds.
Characterising issue-based ?elds
Organizational ?elds arise when organizations partake
of a common meaning system and increase inter-organiza-
tional activity, information exchange and mutual aware-
ness (Di Maggio & Powell, 1983; Hoffman, 1999; Scott,
2008). Issue-based ?elds are distinct from common con-
ceptions of organizational ?elds as they are ‘‘not formed
around common technologies or common industries, but
around issues that bring together various ?eld constituents
with disparate purposes’’ and interests (Hoffman, 1999, p.
352). Issues that become important to the interests and
objectives of a speci?c collective de?ne what the ?eld is,
making links that may not have previously been made.
Hence, an issue-based ?eld is not merely a collection of
in?uential organizations; it is the centre of common chan-
nels of dialogue and discussion where competing interests
continually negotiate over issue interpretation, and thus
the institutions that will guide organizational behaviour
(Hoffman, 1999). While not all ?eld constituents will
impact on negotiations over issue interpretation, this con-
tinual contestation and con?ict can result in a process
more akin to ‘‘institutional war than isomorphic dialogue’’
(Hoffman, 1999, p. 352) as ?elds become arenas of power
relations in which interpretive struggles are constantly
played out among a constellation of actors holding differ-
ent perspectives underpinned by competing logics
N. O’Sullivan, B. O’Dwyer / Accounting, Organizations and Society 43 (2015) 33–55 35
(Greenwood & Suddaby, 2006; Lounsbury, 2007; Wooten &
Hoffman, 2008). These characteristics render issue-based
?elds contested and dynamic in contrast to the settled
character commonly ascribed to organizational ?elds
(Wooten & Hoffman, 2008).
While organizations can claim to be part of an issue-
based ?eld or not, their membership is ultimately de?ned
through patterns of social interaction. Hence, if an organi-
zation chooses to disregard an emerging issue, for exam-
ple, the issue of socially accountable project ?nance
studied in this paper, others may crystallise the ?eld for-
mation process for them (Hoffman, 1999). This process is
often stimulated by social movement campaigns and/or
protests raising awareness of a new issue or offering alter-
native framings of an existing issue.
The role of internal and external (social) movements in issue-
based ?eld structuration
Hoffman’s (1999) conceptualisation of issue-based
?elds as socially constructed, dynamic and political spaces
is complemented by the social movement perspective as
this perspective accentuates the role that collective action
and contentiousness play in ?eld structuration processes
(King & Pearce, 2010). Social movement theory highlights
how actors work collectively to frame (societal) issues of
concern and mobilize collective rationality, resources
(which can be political, ?nancial, organizational, cultural
or symbolic) and action around these issues in order to
induce ?eld level change by altering embedded norms, val-
ues and practices (McCarthy & Zald, 1977; Misangyi,
Weaver, & Elms, 2008). Movements operate both within
and outside (or on the periphery of) existing ?elds
(Davis, Morrill, Rao, & Soule, 2008) and can have a pro-
found effect on ?eld structuration and change processes
(Lounsbury et al., 2003), especially those focused around
speci?c issues of societal concern such as corporate
accountability (Hoffman, 1999; Van Wijk et al., 2013).
Actors within movements (re)construct collective ratio-
nales for institutional change in order to gain legitimacy or
support for their preferred choice of action (Hardy &
Maguire, 2008; Schneiberg & Lounsbury, 2008). They
mobilize narratives, rhetoric and analogies – for example,
the publication of books, reports and media stories – to
help frame and theorize their vision of change (Etzion &
Ferraro, 2010; Greenwood & Suddaby, 2006). Sense-mak-
ing, interpretation, and the formulation of responses and
motivating actions regarding an identi?ed problem are
embedded in framing processes (Benford & Snow, 2000),
while theorization highlights the failings of existing norms
and practices and mobilizes understandable and com-
pelling formats to ‘‘justify. . . new norms and practices in
terms of moral or pragmatic considerations’’ (Dacin,
Goodstein, & Scott, 2002, p.48). Both framing and theoriza-
tion enable movements to ‘‘discredit the status quo and to
present the alternative practices they are championing as
necessary, valid and appropriate in ways that resonate
with other ?eld members’’ (Hardy & Maguire, 2008, p.
208).
Movements external to existing ?elds (external move-
ments) tend to challenge dominant institutions and
institutional arrangements. Given that individual actors
at the periphery of ?elds may lack resources and in?uence
(Hardy & Maguire, 2008), these external movements can
develop as a vehicle of collective action, or ‘‘an accumula-
tor of political power’’ (Schneiberg & Lounsbury, 2008,
p.664) by pooling individual peripheral actor efforts and
resources in order to better in?uence change within an
existing ?eld (Den Hond & De Bakker, 2007; King, 2008).
These ‘‘challenger’’ movements (Fligstein, 1996) often
adopt a con?ict-oriented character (but see, Van Wijk
et al., 2013) in order to disrupt, rede?ne or reframe existing
arrangements using protests, boycotts and direct action
aimed at dramatising perceived problems (Hoffman,
1999; King & Soule, 2007). By promoting an awareness of
certain problems, they seek to subvert the taken-for-grant-
edness of existing arrangements and evoke controversy
and debate within existing ?elds. This can provoke new
patterns of interaction among organizations revolving
around speci?c issues of concern or controversy (Soule,
2012).
Internal movements seek to instigate change from
within ?elds using established networks, resources and
power structures. In contrast to external movements they
‘‘may be more likely to err on the conservative side’’
(Schneiberg & Lounsbury, 2008, p. 660) by seeking to com-
bine proposed new practices with prevailing models and
arrangements in order to keep existing structures largely
intact (Fligstein, 1996). Their individual participants are
‘‘interest-driven, aware and calculative’’ (Greenwood &
Suddaby, 2006, p. 29) often occupying dominant ‘‘subject’’
positions as central actors within existing ?elds; thus pro-
viding the power and resources necessary to mobilize col-
lective institutional action (Maguire et al., 2004; Rao,
Monin, & Durand, 2003; Sherer & Lee, 2002). Internal
movements’ preference for incremental change means that
they often oppose the organized attempts by external
movements to change the extant institutional order (Rao,
Morrill, & Zald, 2000). In some cases, in theorizing and
enacting their (limited) vision of change they seek to
assimilate the competing institutional rationale and logics
of external movements within the prevailing logic (or
logics) of the existing institutional environment (see,
Thornton, Ocasio, & Lounsbury, 2012, pp. 165–167).
Hence, internal movements often mobilize ‘‘rival coalitions
of issue entrepreneurs’’ (Rao et al., 2000, p. 261) champion-
ing less radical frames of action. They enrol support by
using established networks and resources to diffuse alter-
native, less radical practices to those proposed by external
movements, and ‘‘[draw] on existing institutional elements
and models to craft new systems’’ (Schneiberg &
Lounsbury, 2008, p.656). In doing so, they become institu-
tional forces in themselves, acting as (political–cultural)
vehicles ‘‘for diffusion, theorization, recombination and
other institutional processes within ?elds’’ (Schneiberg &
Lounsbury, 2008, p.656).
Recent work suggests that collaborative efforts between
external, challenger movements and incumbents in mature
?elds have, in practice, been neglected as avenues to affect
?eld-level change (see, Van Wijk et al., 2013). Van Wijk
et al. (2013, p. 381) indicate that the nature of the issue
promoted by an external movement in?uences the
36 N. O’Sullivan, B. O’Dwyer / Accounting, Organizations and Society 43 (2015) 33–55
interplay between the external movement and incumbents
in the mature ?eld to which the issue relates. They contend
that ambiguous issues that are dif?cult to measure and
attribute allow more room for external in?uence on an
issue’s social construction. Issue ambiguity is seen to offer
more options for incumbent involvement in the social con-
struction of the issue and may facilitate collaboration
between external and internal movements. This collab-
oration, under certain conditions, is seen as potentially
leading to incremental as opposed to radical change in
the mature ?eld which the issue impacts upon.
Moreover, collaboration between external and internal
movements regarding an issue is deemed more likely
where legal, governmental and market pressures support
the external movements’ stance on an issue (Hoffman,
1999; Van Wijk et al., 2013).
We mobilize Hoffman’s (1999) issue-based ?eld con-
ception and (aspects of) social movement theory above to
examine the role played by internal and external (social)
movements in the structuration of an issue-based ?eld
centred around the EP. We seek to advance Hoffman’s con-
ceptualisation of issue-based ?elds by unveiling how and
why the EP issue-based ?eld structuration process evolved
an institutional infrastructure based upon the infrastruc-
ture of the mature project ?nance ?eld it straddled, and
which the issue of socially accountable ?nance impacted
upon. Drawing on our analysis we construct a theoretical
model of issue-based ?eld structuration and unveil how
the nature of the issue fuelling (social) movement activity
in?uences the impact of external and internal movements
on institutional change and issue-based ?eld structuration.
Prior to presenting this structuration process and
accompanying theorisation, the following section speci?es
the research methods we adopted.
Research methods
Research design and data sources
In order to gain an in-depth understanding of the com-
plexities underlying the Equator Principles (EP) issue-
based ?eld structuration process (and associated develop-
ments in Equator Principles Financial Institution (EPFI)
social accountability) we adopted a qualitative case-based
research approach (Cooper & Morgan, 2008). This drew on
twenty-eight semi-structured interviews conducted over a
three year period involving thirty individual interviews
with some of the most prominent actors associated with
the development and emergence of the Equator
Principles.
6
This was supplemented with an extensive
examination of the manifest (literal meaning) and latent
(deep structural meaning) content of public and private
publications relating to the development of the EP. The main
objective of the study was to capture, interpret and repre-
sent the EP issue-based ?eld structuration process drawing
on the meanings key actors brought to the process (Denzin
& Lincoln, 2000; Gephart, 2004).
The case study was conducted in two phases between
2006 and 2009. The ?rst phase was undertaken between
June and December 2006 and sought NGO perspectives
on how and why the EP were developed and how they
were being implemented, especially the extent to which
the process through which they emerged impacted on
how the Equator Principles Financial Institutions (EPFIs)
7
– the ?nancial institutions that adopted the Equator
Principles – addressed their social accountability. Semi-
structured interviews were conducted with nine senior
individuals from nine different NGOs that were members
of BankTrack, an international coalition of NGOs that has
closely monitored the development of the EP and the ?nanc-
ing activities of the EPFIs. These interviewees were purpo-
sively chosen due to their historical and ?rst-hand
knowledge of NGO campaigns surrounding ?nancial sector
investments with signi?cant social and environmental
impacts in the run-up to and following the launch of the
EP. Access to these interviewees was achieved through the
?rst-named author’s contact with one of the NGOs from
her previous work experience with UNEP-FI,
8
as well as
through the BankTrack Coordinator. The BankTrack
Coordinator was interviewed a second time in January
2008 to gain more up-to-date NGO perspectives on the man-
ner in which the EP had progressed since 2006. This sought
to capture the processual nature of the EP phenomenon and
NGO perceptions of this process as it emerged over the
2003–2008 period (see Table 1).
The second phase of the study was conducted between
May 2007 and April 2008. This enrolled a cross-section of
Equator Principles Financial Institution (EPFI) perspectives
on why and how the EP were created and implemented
between 2003 and 2008; and whether and if so, how, this
affected the social accountability of the EPFIs. Access to ten
different EPFIs was gained and included:
(1) Four ‘EP leader’ organizations, i.e. banks that were
directly involved in developing the EP and adopted
them when they were launched on June 4th, 2003.
They comprised one Australian EPFI, one Dutch
EPFI, one UK EPFI and one US EPFI.
(2) Three EP ‘early adopter’ organizations, i.e. banks that
adopted the EP between June and October 2003.
They comprised one (other) Dutch EPFI and two
(other) UK EPFIs; and
(3) Three EP ‘late adopter’ organizations, i.e. banks that
adopted the EP between November 2005 and
September 2007. They comprised one French EPFI,
one Dutch/Belgian EPFI and one South African EPFI.
The majority of interviewees from these EPFIs held
senior social and environmental risk management
6
These comprised senior representatives from the two key actors in this
process, the Equator Principles Financial Institutions (EPFIs) and NGOs, as
well as other actors including an EP lawyer, EP consultant and two mining
companies (an Australian gold mining company and a South African
platinum mining company receiving project ?nancing).
7
The EPFIs also encompass the ?nancial institutions who were the
initiators and original developers of the Equator Principles, all of whom
subsequently adopted the Principles.
8
UNEP-FI is the United Nations Environment Programme Finance
Initiative (UNEP-FI). This is a global initiative between UNEP and the
?nancial services sector addressing sustainable ?nance issues.
N. O’Sullivan, B. O’Dwyer / Accounting, Organizations and Society 43 (2015) 33–55 37
positions. A chief operating of?cer, worldwide heads of
sustainability, and executive and associate directors were
also interviewed. Four interviewees were interviewed in
one EPFI. In an additional EPFI two individuals were inter-
viewed separately, while in two other EPFIs two
individuals were interviewed together. Hence, while the
total number of EPFI organizations included in the study
was ten, the total number of individual interview meetings
was fourteen, and the total number of interviewees in
these fourteen meetings was sixteen (see Table 2).
Table 1
Non-Governmental Organization (NGO) interviewees.
Name of NGO Position of interviewee Location of
interview
Date Interview
duration
(min)
International Rivers Network (IRN) Policy Analyst Sussex, U.K. 11/06/2006 60
Friends of the Earth (FoE), US Program Manager, Green Investments
Project
Sussex, U.K. 11/06/2006 65
Rainforest Action Network (RAN)
a
Former Director, Global Finance Campaign Sussex, U.K. 11/06/2006 60
Friends of the Earth (FoE), Amazonia
a
Former Manager, Eco-Finance Project London 12/06/2006 60
Platform Researcher London 13/06/2006 75
Berne Declaration Head, Private Finance Programme Zurich 12/07/2006 90
Campagna per la Riforma della Banca Mondiale (CRBM) Co-ordinator Amsterdam 03/10/2006 60
WWF – UK
a
Former Global Policy Advisor Telephone
interview
09/10/2006 60
Friends of the Earth (FoE) Europe/International
(formerly FoE Netherlands/Milieudefensie
b
)
Coordinator, Corporate Campaign FoE
International and FoE Europe
Telephone
interview
04/12/2006 60
BankTrack Coordinator Utrecht,
Netherlands
11/01/2008 103
Key:
a
These interviewees had moved to new organizations following their interviews or after they had been approached for interview. However, they
indicated that the views expressed were representative of their experiences with the BankTrack member organizations in question.
b
Head of International Campaign on Globalisation and Environmental Issues at FoE Netherlands (Milieudefensie). This interviewee was involved in the
drafting of the Collevecchio Declaration.
Table 2
Equator Principles Financial Institution (EPFI) interviewees.
EPFI designation Position held by interviewee Location of interview Date Interview duration (min)
Dutch EPFI 1
a
Former Head of Sustainable Risk Management Amsterdam 22/05/2007 105
Interviewee 1
Australian EPFI Chief Operating Of?cer London 29/05/2007 75
Dutch EPFI 1 Head of Sustainability Worldwide London 29/05/2007 64
Interviewee 2 Follow-up phone call 07/09/2007 64
UK EPFI 3 Head of Group Policy & Risk Reporting London 30/05/2007 78
UK EPFI 2 Senior Manager, Sustainability Risk Management London 17/09/2007 82
UK EPFI 1 Head, Environmental Risk Management London 19/09/2007 98
Interviewee 1 Follow-up phone call 19/06/2009 60
Dutch EPFI 1 Executive Director Amsterdam 25/09/2007 92
Interviewee 3
Dutch EPFI 1 Head, Sustainable Risk Management Amsterdam 28/09/2007 51
Interviewee 4
South African EPFI Head, Governance & Sustainability Telephone Interview 11/12/2007 57
US EPFI Director, Environmental & Social Risk Management Telephone Interview 19/12/2007 42
French EPFI Head, Environmental Team, Capital Raising &
Financing
Paris 15/01/2008 52
Interviewee 1
French EPFI Secretariat, Sustainable Development Group
Interviewee 2
Dutch/Belgian EPFI Head, Environmental & Social Unit, Business
Development Section
Rotterdam 18/01/2008 61
Interviewee 1
Dutch/Belgian EPFI Senior Risk Analyst, Environmental & Social Unit
Interviewee 2
Dutch EPFI 2 Advisor, Environmental & Social Risk Management
Policy
Amsterdam 13/02/2008 61
UK EPFI 1 Associate Director, Investment Banking Division:
Mining & Metals Team
London 28/04/2008 76
Interviewee 2 Follow-up phone calls 25/11/2008 60
26/11/2008 38
Key:
a
Numbers included beside the Equator Principles Financial Institution (EPFI) organizational names (e.g. UK EPFI 1, 2, 3) sequence the date the particular
Equator Principles Financial Institution adopted the EP and not the sequence in which the interviewees were interviewed.
38 N. O’Sullivan, B. O’Dwyer / Accounting, Organizations and Society 43 (2015) 33–55
Prior to both the NGO and EPFI interviews, semi-struc-
tured interview guides were prepared comprising of ques-
tions that represented the core research themes or
constructs informing the study (Eisenhardt, 1989; Patton,
2002). These NGO and EPFI ‘‘master-guides’’ were supple-
mented with organizational-speci?c guides/questions for
each individual interview which were informed by com-
pany websites, reports, external media coverage and the
?rst-named author’s observations of and informal interac-
tions with some NGO and EPFI representatives at a number
of corporate social responsibility/sustainable ?nance con-
ferences and meetings over the course of 2005–2008.
Eight of the ten NGO interviews were conducted face-
to-face. The remaining two were conducted by telephone
due to scheduling clashes. Twelve of the fourteen EPFI
interviews were conducted face-to-face, while the inter-
views with the South African and US EPFIs were conducted
by telephone due to the geographical distance from the
researchers. In many cases there were numerous follow-
up emails and telephone calls with interviewees providing
further points of clari?cation that were required following
the interviews. All interviews lasted an average of one
hour, were recorded on a MP3 player with the consent of
the interviewees, and were fully transcribed for analysis
purposes.
Data analysis
Transcript data
In all phases of the research, interview transcripts were
?rstly carefully scrutinised while listening to the recorded
interviews in an effort to identify and correct any errors
that may have arisen during transcription. A set of codes
based on the main question constructs and sub-questions
contained in the interviews was then developed
(Huberman & Miles, 1994; Ryan & Bernard, 2003). These
comprised a mixture of data-driven and (initial) theory-
driven codes (Fereday & Muir-Cochrane, 2006) re?ecting
the key topics addressed in the interviews. The transcripts
were then re-read (in some cases several times, often
simultaneously re-listening to the interviews) and coded.
In the process, any additional issues or codes that may
not have arisen during the initial review of transcripts
were noted.
This descriptive coding assisted the cross-interview
analysis and identi?cation of core themes arising from
the interview data; which acted as the basis for the
descriptive analysis of the interviews that followed
(Patton, 2002) (see Appendix C for a sample of the initial
coding scheme). The transcripts (minus the code analysis)
were then sent to the interviewees via email for review
and approval. Speci?c areas of clari?cation or expansion
for interviewee attention were highlighted and in many
cases some post-interview questions that may have arisen
following the interviews or during the reading of the tran-
scripts were prepared. In certain cases, interviewees went
to great effort to edit and expand upon their individual
interview transcript, with some EPFI interviewees engag-
ing in telephone conversations to address follow-up ques-
tions. These conversations were also recorded and
transcribed.
Observational data
Observations based on the ?rst author’s experiences
while working at UNEP-FI and those arising from the docu-
mentary analysis were enrolled to supplement the inter-
view data analysis. For example, the UNEP-FI
observations provided key insights into the ‘psyche’ of
banks and NGOs; their perceptions of each other; how they
interacted; their differences of opinion on key issues
related to sustainable ?nance; the tensions these differ-
ences caused; their growing mutual awareness and respect
for each other despite the on-going tensions; and the roles
they played in public group forums while developing one-
on-one relationships behind the scenes regarding bank
policy development and other issues related to sustainable
?nance. These observations augmented the speci?c
insights gained during the in-depth interviews and were
supplemented with further observations made at a num-
ber of conferences where sustainable ?nance and/or the
Equator Principles were discussed by both bank and NGO
representatives.
Construction of case narrative
The ?nal interview transcripts were used in the further
identi?cation, or con?rmation, of the key themes emerging
in the interviews (see Appendix C). Such respondent val-
idation enhanced the credibility of the interview data
and the dependability of the research process (Huberman
& Miles, 1994; Patton, 2002). For this paper, these themes
were re-interpreted and framed drawing on the principal
concepts of: ?eld structuration processes; internal and
external (social) movements; and issue-based ?elds. Our
key focus was to ground these concepts in our empirical
analysis in order to investigate, understand and explain
the complexity of the data embedded in the key themes
(Edmondson & McManus, 2007). A number of revised,
interrelated overarching themes emerged from this re-in-
terpretation, and included, inter alia, NGO visions of
socially accountable (‘just’) ?nance; a shared NGO meaning
system – underpinned by a community-oriented environ-
mental and social logic; theorizing risk management;
assimilating competing logics; reconstructing rationales
and logics; incentivising incremental change; mobilising
collective action and cultural resources; internal and exter-
nal (social) movement consultation and contestation (over
social accountability); pooling resources and mobilising an
issue-based community; re?exivity among internal and
external (social) movements; cooperation among competi-
tors; governing an internal (social) movement; actor issue-
identi?cation; and capturing issue ambiguity.
9
The overall
analysis involved an iterative and re?exive interaction
between the above themes and the principal concepts in
order to inductively derive a case analysis focused on: (1)
the NGO activities that helped initiate the EP and in?uenced
the subsequent EP issue-based ?eld structuration process;
(2) how and why the EP and the EP issue-based ?eld struc-
turation process evolved; and (3) the effects of this process
on how the EPFIs addressed their social accountability.
This analysis was subjected to further scrutiny and
9
We would like to explicitly recognise the extensive assistance of the
two reviewers in assisting with the focus of our interpretation.
N. O’Sullivan, B. O’Dwyer / Accounting, Organizations and Society 43 (2015) 33–55 39
enrichment drawing on the broader documentary evidence
analysis and observational data.
Case contextualisation: Project ?nance and the Equator
Principles
Project ?nance has traditionally represented the most
visible and tangible environmental and social impact of
the ?nance sector due to its association with the ?nancing
of large, complex environmentally and socially sensitive
projects involving the installation of dams, power plants,
mines, and oil and gas pipelines in developing world and
emerging economies. The lender normally relies on the
revenues generated by a single project for repayment of
and security for the ?nance provided. For example, in the
case of the funding of a power plant, the lender is usually
paid solely or almost exclusively out of the money gener-
ated by the contracts for the facility’s output, such as the
electricity sold by the plant. The borrower is usually an
SPE (Special Purpose Entity) that is not permitted to per-
form any function other than developing, owning, and
operating the funded installation. Repayment therefore
depends primarily on the project’s cash ?ows and on the
collateral value of the project’s assets (Equator Principles
II, 2006).
Project ?nance deals are ?nanced by both debt and
equity. Depending on the project, more than one type of
debt provider may be involved. This can include a bank
syndicate, multilateral agencies (e.g. The World Bank,
International Finance Corporation (IFC) and regional devel-
opment banks), bilateral agencies (development agencies
and export–import ?nancing agencies) and/or Export
Credit Agencies (ECAs). Equity for projects is normally pro-
vided by the project sponsor(s) and may be supplemented
by equity raised in national and international capital mar-
kets (Esty & Sesia, 2005; Hoffman, 2008).
Syndication is a typical ?nancing structure for project
?nance as it spreads out the potential risks associated with
a project. An average project ?nance deal may have 10–15
banks involved in the syndicate, including the ‘‘lead arran-
ger’’. The lead arranger agrees with the client to underwrite
the loan and to sell the remaining amount to other ?nan-
cial institutions. This creates a syndication of banks that
purchase the loan and thus provide debt ?nancing for the
project. ‘‘Second tier banks’’, for example, smaller project
?nanciers or emerging market banks, normally make up
the majority of this syndicate of lenders.
The Equator Principles were designed as a set of volun-
tary environmental and social risk management guidelines
for project ?nance. Based on the then International Finance
Corporation (IFC) safeguard policies, ?nancial institutions
(FIs) were requested to apply the Principles in their execu-
tion and management of project ?nance deals of (origi-
nally) $50 million dollars and upwards. When ?nancing
(and later also advising on) a project, adopting ?nancial
institutions were speci?cally asked to: review and cate-
gorise projects as either ‘‘A’’ (high risk), ‘‘B’’ (moderate risk)
or ‘‘C’’ (low risk) as per IFC classi?cations; ensure an
environmental (and later social) assessment and manage-
ment plan for the project was developed; ensure adequate
community consultation was conducted; covenant the
borrower to meet Equator Principles’ requirements;
employ independent experts to monitor borrower compli-
ance; and work with borrowers to address any breaches of
compliance. By adopting the Equator Principles, ?nancial
institutions voluntarily committed to apply environmental
and social principles to the design, execution and manage-
ment of project ?nance loans and pledged not to engage
with or provide ?nance to clients who would not comply
with the Principles
10
.
Case analysis
Holding project ?nance to account: The emergence of an
external NGO movement
Throughout the 1990s, there was widespread pri-
vatisation of large-scale public infrastructure projects
(e.g. power plants, roads, ports and telecommunications)
in developing countries. Combined with the withdrawal
of World Bank lending, this led to a dramatic increase in
(Western) commercial bank ?nancing for these projects
(Wright, 2009) which were rife with adverse environmen-
tal and social impacts. A number of international NGOs
became concerned that this increased private sector
?nancing meant that ‘‘private banks [were] able to operate
in relative anonymity’’ (Rainforest Action Network (RAN)
interviewee,
11
) and were unconcerned about and unac-
countable for the large scale environmental and social
impacts of the projects they ?nanced. These NGOs wanted
environmental and social impacts integrated into and priori-
tised within commercial bank lending and investment deci-
sions. Drawing on their extensive knowledge base, they
commenced holding these banks to account for the environ-
mental and social impacts of their lending activities using
direct advocacy campaigning and strategic shareholder acti-
vism (O’Sullivan & O’Dwyer, 2009; Waygood, 2006).
Many of the early campaigns were led by individual
NGOs operating alone. These included Friends of the
Earth (FOE) US’s 1995 campaign against Merrill Lynch
and Morgan Stanley regarding their ?nancial links with
the Three Gorges Dam (Ethical Corporation, 2006), and
FoE Netherlands’ 1997 campaign against ABN Amro’s
?nancing of the Freeport McMoRan/Rio Tinto gold and cop-
per mining project in West Papua, Indonesia (Steen, 2008).
One of the most successful campaigns was The Rainforest
Action Network’s (RAN) sustained four-year attack on
Citigroup which began in 2000. RAN was highly critical
of Citigroup’s funding for destructive fossil-based projects
(Wright, 2009) and launched customer boycotts against
Citigroup in the US. Between 2000 and 2001, FoE
Netherlands and Greenpeace Netherlands also led a highly
visible campaign against Dutch banks involved in palm oil
plantations in Indonesia. The campaign led to signi?cant
media coverage and a letter writing/post card campaign
attacking these banks, which many NGOs believe
10
The EP have been subject to two revisions since their inception. The
most recent revision process occurred between 2011 and 2013 and
culminated in the launch of what was called EP III in June 2013.
11
Please see Table 1 for details of the NGO interviewees.
40 N. O’Sullivan, B. O’Dwyer / Accounting, Organizations and Society 43 (2015) 33–55
in?uenced ABN Amro and four other Dutch Banks (FMO,
Fortis, ING and Rabobank) to develop forestry policies for
clients active in these sectors (FoE Netherlands/Europe
interviewee).
In 2002, in an effort to coordinate this escalating, but
somewhat disparate campaigning, a global coalition of
NGOs – including CRBM, FoE Netherlands, FoE US, The
Berne Declaration, RAN and WWF-UK – pooled their politi-
cal and cultural resources and congregated in order to
develop a collective set of formal demands for the ?nancial
sector known as ‘‘The Collevecchio Declaration’’. Launched
in January 2003, the Declaration outlined various commit-
ments for the incorporation and prioritisation of environ-
mental and social concerns into all ?nancial operations,
including commitments to sustainability, responsibility,
accountability and transparency. The proposed policies
and procedures were aimed at signi?cantly broadening
?nancial institutions’ (FIs’) risk management practices to
ensure enhanced consideration of environmental and
social issues (BankTrack, 2004b). The Declaration called
upon FIs to take immediate steps to implement the com-
mitments in order to ensure that they retained their ‘‘social
licence to operate’’; a licence the NGOs claimed was under
threat as ‘civil society’ was increasingly questioning FIs’
social accountability. Essentially, the Declaration explicitly
framed what the NGO collective believed socially account-
able ?nance should represent. This collective vision was
underpinned by the adoption of agenda-setting rhetoric
mobilising the notion of ‘just ?nance’, the rationale for
which was underpinned by a community-oriented
environmental and social logic:
I think there was the need for us [NGOs] at the time
. . . to get out ahead of the banks in terms of what our
vision of ‘just ?nance’ was, so that we could then
begin to cross the road there. You know there’s
always a risk in plotting the road by walking it
because then we’re adhering our own vision to what
the banks think is possible. And actually, I think the
Collevecchio Declaration [was] instrumental in setting
the goalposts.
[Rainforest Action Network (RAN) interviewee]
Theorizing and mobilising resources and action: The advent of
the internal Equator Principles Financial Institution (EPFI)
movement
The sustained intensity of NGO campaigning, now for-
mally framed within the demands of the Collevecchio
Declaration, was widely viewed as having tarnished the
reputations of targeted ?nancial institutions (FIs) while
increasing the risk of litigation against them due to some
campaigns’ exposure of environmental and social miscon-
duct by FI project ?nance clients. The perceived risk of
retail customer boycotts and the emergence of new forms
of shareholder activism caused some commercial bank
executives to believe they needed to respond to these criti-
cisms in a coordinated fashion.
Hence, in October 2002, ABN Amro and the
International Finance Corporation (IFC) convened a meet-
ing in London with Barclays, Citigroup and WestLB to begin
discussions on a common approach to perceived chal-
lenges to their risk management frameworks. There was
signi?cant concern that banks were ‘‘not doing enough
due diligence and truly understanding the risks’’ (Dutch
EPFI 1, Interviewee 1
12
) associated with their project
?nance deals. Each bank at the meeting had been the target
of extensive NGO campaigning, and all later acknowledged,
in various public domains (and within our research inter-
views), the signi?cant in?uence the NGO campaigns had
on their increased scrutiny of existing approaches to project
?nance.
The subsequent initiation of the Equator Principles was
thus based upon discussions between elite actors within
these four banks, in association with the IFC. They theo-
rized the adverse environmental and social impacts of pro-
ject ?nance as a problem of risk management that could be
resolved by adopting a set of agreed lending principles
based on risk management concerns. The underlying mar-
ket logic driving project ?nance risk management proce-
dures underpinned these legitimating accounts and
represented the beginning of an effort to reconstruct the
project ?nance rationale by assimilating the NGOs’ com-
munity-oriented environmental and social logic within
the prevailing market-oriented risk management logic
underpinning project ?nance (Greenwood, Suddaby, &
Hinings, 2002; Schneiberg & Lounsbury, 2008; Thornton
et al., 2012). The market logic was perceived as resonating
best with the values and interests of other project ?nance
?eld participants which could assist in mobilising collec-
tive action and resources for the development of the EP.
The global stature of the four leading institutions and their
central role within the project ?nance ?eld added credibil-
ity to their efforts and acted as resources that assisted
them in convincing six additional commercial banks to
support the EP launch. Among these additional six banks
there was a strong sense that this was a development that
was potentially ground breaking and required their
involvement:
[We thought] if the big boys are in there, the big global
banks [who are] the big market leaders in project
?nance, then obviously this is serious. . . This s going
to be big. . . [and that] . . . it was [potentially] ground
breaking work in terms of incorporating E, S and G
[environment, social and governance]. . . into the bank-
ing sector.
[Australian EPFI]
The initial group of four banks were keen to mobilize a
critical mass of leading project ?nance institutions to ?na-
lise and launch the EP in order to ensure the credibility of
the initiative, reduce the potential market risks associated
with it, and to position the EP as an industry standard
thereby coercing non-EP compliant banks into adopting
the Principles. The nature of the existing project ?nance
syndication market was seen as signi?cantly assisting with
this aim:
12
Please see Table 2 for details of the Equators Principles Financial
Institution (EPFI) interviewees.
N. O’Sullivan, B. O’Dwyer / Accounting, Organizations and Society 43 (2015) 33–55 41
We wanted critical mass. I mean I was Global Head of
Project Finance at the time, so you know, we were
concerned about the competitive element as well
[. . .] and we felt that if you could get the right banks
involved, because of the nature of the syndication
market for these deals, it would help to position
Equator as an industry standard [. . .] It would mean
that every deal that they [non-EP compliant banks]
did with an Equator bank leading it would be
Equator compliant. It would make it more dif?cult
for them [non EP compliant banks] to actually arrange
and structure a transaction unless they made it
Equator compliant.
[Dutch EPFI 1, Interviewee 2]
Moreover, many felt that a standardised framework for
assessing environmental and social risks in project ?nance
would greatly improve what they saw as the ad-hoc appli-
cation of existing World Bank environmental guidelines to
project ?nance deals, and would also assist in ‘‘levelling
[. . .] the playing ?eld’’ (UK EPFI 1, interviewee 1) with
respect to environmental and social issues in the project
?nance market. This would present a more coherent, col-
lective response to the concerns of campaigning NGOs
and replace the prevailing ‘‘case speci?c, ad-hoc defence
against NGO criticism’’ (Dutch EPFI 1, Interviewee 1).
Theorizing and crafting the Equator Principles: Advancing a
rationale for incremental change in project ?nance
The initial ten banks (we term these the ‘EP leaders’
13
)
agreed that the EP should be structured to apply only to pro-
ject ?nance activities. They rationalised this not only
because these activities were the main focus of NGO cam-
paigning, but also because the size and structured nature
of project ?nance deals made it easier for ?nancial institu-
tions (FIs) to identify the environmental and social risks
associated with particular projects. This allowed them to
adjust their credit risk assessment procedures and loan
documentation accordingly. In project ?nance, the use of
proceeds is known and the projects’ expected revenue
streams are regarded as remuneration for the loan. Hence,
any potential environmental and social risks that could
hamper the successful construction and operation of a pro-
ject, and thus potentially place the client in default of the
loan, ought to be taken into consideration at commence-
ment. In short, project ?nance was ‘‘the one product where
banks ha[d] the unique combination of exposure to risk
and ability to in?uence’’ (Dutch EPFI 1, Interviewee 1).
Project ?nance therefore made environmental and social
issues more ‘tangible’ and manageable than, for example,
standard commercial loans where the use of proceeds was
not always known and where FIs had less leverage to call
in a loan on environmental and social grounds alone.
Consistent with their vision of incremental change, in draft-
ing the Principles the banks drew on existing resources
within the mature project ?nance ?eld including: interna-
tional environmental and social policies and guidelines;
their own knowledge of environmental issues; and one of
the bank’s mining policies.
In general, the EP leaders were aware of the extensive
policy and procedural implications that the EP could have
within their own organizations and wanted to ensure that
the EP could be streamlined with their existing operations.
It was therefore essential that the Principles were framed
as being easily integrated within traditional decision-mak-
ing processes in the project ?nance banks:
When banks adopt or develop policy it literally becomes
law, and it’s codi?ed into the way in which that bank
does business. So, banks do not take lightly the develop-
ment of policy on anything. Trust me, [our] oil and gas
policy took a year and a half to develop and probably
about three months of approval through four different
committees [. . .] And in drafting the Equator
Principles, that was what all the banks were looking
at, they were saying this is going to go into my invest-
ment guidelines, this is going to go into my credit
guidelines, this is going to change the way in which I
look at projects. I need to ?nd ways in which this is built
into whatever structures.
[Dutch EPFI 1, Interviewee 1]
Furthermore, in order to encourage wider acceptance
within the project ?nance ?eld, a loosely speci?ed, discre-
tionary approach to the structure of the EP was adopted
especially regarding accountability requirements related
to external reporting on compliance with the Principles:
The reason [the EP] moved so quickly was because it
was a loose association, it was very informal and it
was voluntary. If we’d been looking at building
something that was a rigid [. . .] structure with formal
governance, legal obligations and some sort of accred-
itation [. . .] we’d still have been debating it I’m sure. It
[would] never have been launched. And also, more
banks would have been cautious about adopting it.
[UK EPFI 1, Interviewee 1]
This overarching risk management rationale, combined
with the EP leaders’ powerful political positions in the
mature project ?nance ?eld, assisted in diffusing the EP
following their launch on June 4th, 2003. The ‘early adop-
ters’ in our study – ?nancial institutions who adopted
the EP between June and October 2003 – perceived the
EP as a serious initiative that went beyond public relations
and competitive positioning due to the legitimacy they
attached to the ?nancial institutions initially involved.
Moreover, these early adopters highlighted the importance
of being part of an evolving movement towards EP-condi-
tioned loans in the project ?nance market and the practical
bene?ts of a standardised approach to managing environ-
mental and social risks throughout the ?eld.
13
Throughout the case narrative ‘EP leaders’ is the term we use to refer
collectively to the four commercial banks that initiated the development of
the EP and the six banks that later joined them to launch the EP on June 4th,
2003. These ten banks are distinguished from those banks that adopted the
EP after they were launched. This latter group are divided into: (1) EP ‘‘early
adopters’’ i.e. those banks that adopted the EP between June and October
2003; and (2) EP ‘‘late adopters’’ i.e. those banks that adopted the EP
between November 2005 and September 2007. The ‘EP leaders’, ‘early
adopters’, and ‘late adopters’ are collectively referred to as the ‘Equator
Principles Financial Institution (EPFI) movement’.
42 N. O’Sullivan, B. O’Dwyer / Accounting, Organizations and Society 43 (2015) 33–55
Rival movement consultation and contestation
By late 2003, early 2004, a small but growing ?eld
focused around the EP was emerging. This was initially
populated by the nascent Equator Principles Financial
Institution (EPFI) and NGO movements, and, to a lesser
extent, the International Finance Corporation (IFC).
Subsequently, heightened levels of interaction, mutual
awareness, and an increase in the information load sur-
rounding the EP materialised both between and among
these bodies. For example, given widespread claims that
the EP were starting to alter the face of the project ?nance
market, the EPFI movement started holding meetings to
share their initial experiences with EP implementation;
discuss the impact of the EP on risk management frame-
works; and outline IFC training on EP implementation.
These meetings sought to enhance the visibility of emerg-
ing organizational practices in order to assist EP diffusion
among non-EP adopting banks.
In January 2004, the campaigning NGOs organized
themselves into a more formal movement named
BankTrack. Their aim was to establish a more coherent net-
work capable of exerting greater in?uence on the activities
of the private ?nancial sector. BankTrack immediately
entered into a formal dialogue with the EPFI movement,
particularly around the lack of accountability mechanisms
embedded in the EP structure and across EP banks. Field
formation around the EP escalated over the following
two years as EP adopters increased and environmental
and social consultants and lawyers focused on the EP
emerged to advise the increasing number of EP adopters:
Once the Equator Principles were launched, then more
dialogue started, the institutions talked to each other,
we learned through each other. There was a huge
amount of sharing of information: ‘this is what we’re
doing, what are you doing?’ Meetings with the NGOs;
two-day meetings talking about reporting and trans-
parency [. . .] we’d obviously got BankTrack [there] with
all their own aspirations. And you know, we’d sit down
and we had good honest debates with the NGOs. So
yeah, the Equator Principles themselves evolved in that
initial period, that 12 to 18 month period after they
were launched.
[Australian EPFI]
The interaction between the EPFIs and BankTrack was
often confrontational, particularly as BankTrack continued
to contest the lack of EPFI accountability at ?eld and orga-
nizational levels in a series of highly publicised documents
(BankTrack, 2003, 2004a, 2004b, 2004c, 2005a, 2005b).
While the NGO movement openly acknowledged that the
development of the EP was the ‘‘?rst time there had
been. . . a substantive industry response to the sustainabil-
ity agenda. . . laid out by. . . NGOs’’ (Friends of the Earth
(FoE), US), they continually contested the discretionary
nature of EP adoption, implementation, and compliance.
For the NGOs, these perceived de?ciencies raised ser-
ious questions about the EPFIs’ substantive commitment
to their environmental and social responsibilities, particu-
larly as the Collevecchio Declaration had speci?ed the need
for banks to address all of their ?nancial operations and
not just project ?nance; which represented less than 5
per cent of commercial bank activities. Moreover, despite
the fact that some EPFI leaders were beginning to report
on EP implementation, the perceived slow pace and incon-
sistency of implementation, transparency and disclosure
across different EPFIs, as well as evidence of the continued
?nancing of questionable projects by certain EPFIs enraged
BankTrack. This was exacerbated by the continuing
absence of ?eld-level governance mechanisms to hold the
increasing number of EPFI adopters to account. While
BankTrack met with the EPFIs and relayed these concerns,
the EPFIs refused outright to establish the ‘multi-transpar-
ent accountability mechanisms’ that BankTrack requested:
After a year and a half we came to them and said ‘‘it’s
not working, we have some banks that have gone
beyond project ?nance or whatever. . .and we have
other banks that aren’t even internalising whatever pro-
cedures [are necessary] for implementation or keep
?nancing rubbish, so what the hell is going on?’’ So, if
you want to protect the bottom line, to be coherent,
you need to put up a sort of multi-transparent account-
ability mechanism. And they said ‘‘no, forget it’’ . . . And I
still see that this is the dividing argument between us
and them. I mean beyond whatever policies that you
adopt, the fundamental issue is. . .how you are being
held accountable in achieving this by those that are
affected by your operations?.
[Campagna per la Riforma della Banca Mondiale (CRBM)
interviewee]
Many EPFI interviewees claimed that the EPFIs’ tenta-
tive approach to accountability was in?uenced by the
mature commercial bank project ?nance ?eld’s entrench-
ment in a culture of secrecy, commercial con?dentiality,
and legal restrictions. Given these characteristics, these
interviewees claimed that the EP actually represented a
signi?cant departure for the banks involved given that
many of them had, at this time, developed no sustainability
mandates, established no separate sustainability divisions,
and had never produced sustainability reports. Moreover,
despite the absence of accountability criteria in the original
principles, several EP leader interviewees’ claimed that
there existed a ‘‘gentleman’s agreement’’ (Dutch EPFI 1,
Interviewee 1) within their collective to take EP imple-
mentation and compliance disclosures seriously. They
had agreed that due to the voluntary nature of the
Principles, each individual bank should be responsible for
its own EP implementation and disclosure and was to be
‘‘judged [on its] own individual performance’’ (UK EPFI 1,
Interviewee 1). There was a collective view that no bank
had the right to ‘‘tell another bank how to run their busi-
ness’’ (UK EPFI 1, Interviewee 1) and, as each bank was
structured differently, a ‘‘one size ?ts all’’ approach to
implementation and accountability was unworkable.
Nevertheless, the EPFIs were not entirely immune to the
NGOs’ concerns and gradually began to acknowledge some
of the emerging challenges associated with the diffusion
and governance of the EP. For example, throughout 2004
and 2005, a ‘?oating’ EP secretariat was established and
run by one EPFI via the ?edgling EP website. Annual meet-
ings with NGOs and small EPFI-NGO working groups on
N. O’Sullivan, B. O’Dwyer / Accounting, Organizations and Society 43 (2015) 33–55 43
issues such as disclosure were formed and a rotating EPFI
Chair position was established. Hence, a level of re?exivity
was evident amongst active EPFIs regarding the manner in
which the EP, the EP issue-based ?eld and the EPFI move-
ment were evolving. Nonetheless, despite persistent NGO
criticism, the EPFIs exercised their hierarchical position in
the issue-based ?eld and continued to reject the NGO
movements’ requests for more stringent accountability
and governance of the EP and EPFI movement. This resis-
tance to enhanced accountability dominated interactions
between EPFIs and NGOs, and directly in?uenced the
ongoing structuration of the issue-based ?eld throughout
2004 and 2005.
The persistence of competing accountability rationales
In February 2006, the International Finance Corporation
(IFC) revised its Safeguard Policies (upon which the EP were
based) and introduced environmental and social perfor-
mance standards. In response, the EPFIs organized a
three-month consultation process involving NGOs, project
?nance clients and some of?cial agencies aimed at drafting
a revised set of Principles. These consultations re?ected an
increasing level of interaction between participants in the
issue-based ?eld as well as a slowly emerging recognition
within BankTrack and the EPFI movement of the mutual
bene?ts of more constructive dialogue. Following the con-
sultation process, on July 6th, 2006, the Equator Principles
II (EP II) were launched. One of the key new criteria
involved the establishment of a reporting Principle,
‘‘Principle 10’’ requesting each adopting EPFI to commit
‘‘to report publicly at least annually about its Equator
Principles implementation processes and experience, tak-
ing into account appropriate con?dentiality considera-
tions’’ (EP II, 2006, p.5, emphasis added). This was
accompanied by a footnote, which stipulated that:
Such reporting should at a minimum include the num-
ber of transactions screened by each EPFI, including the
categorization accorded to transactions (and may
include a breakdown by sector or region), and informa-
tion regarding implementation.
[Equator Principles II (EP II), 2006, p.5]
Even though the NGOs generally welcomed improve-
ments to the structure of EP II, BankTrack found Principle
10 vague in its requirements, and complained that no prac-
tical guidance was provided on how it should be imple-
mented. This was deemed a ‘‘lowest common
denominator’’ approach to EPFI social accountability and
an insuf?cient response to the extensive transparency
and disclosure recommendations that BankTrack had
repeatedly framed in detailed texts (see e.g., BankTrack,
2006a, 2006b). The BankTrack coordinator interviewed
claimed that, had it not been for the NGO recommenda-
tions the reporting footnote would never have existed.
The EPFIs, however, again in?uenced by the professional
boundaries of the mature project ?nance ?eld, asserted
that the inclusion of the reporting principle was another
important, incremental step in the progression of the EP.
A minimum standard for reporting was perceived as the
most practical option given the persistence of disclosure-
related challenges surrounding commercial con?dentiality
– particularly regarding the disclosure of internal risk man-
agement procedures to competing banks.
The intensi?cation of issue-based ?eld structuration –
In?uencing the mature project ?nance ?eld
During the revision process, the three ‘late adopter’
interviewees – representing banks that adopted the
EP between November 2005 and September 2007 –
actively considered the signi?cance of the revised EP
implementation and reporting requirements for their orga-
nizations. The evolving issue-based ?eld began to signi?-
cantly in?uence the mature commercial bank project
?nance ?eld when by late 2005 EPFIs were widely quoted
as arranging over 70% of project ?nance deals. These mar-
ket trends meant it was becoming increasingly dif?cult for
any bank to enter into project ?nance syndication without
being an EP adopter:
Basically, the idea in the end was that we had all the
structures, all the tools to be in line with the Equator
Principles, so why not adopt them? And on the other
hand there were some, of course, broader connections
[between] the top management and IFC, and with other
banks, [who were] saying ‘you should join now because
it could be very good for you and the Equator
Principles’, because [Name of interviewee organization]
is such a big institution for project ?nance [. . .] I think
what was also an incentive to join was that when we
asked the business line what they thought about it they
said ‘well, we already asked to [adopt it] actually
because the market is asking for it’. Nowadays, when
you are either an advisor or the arranger for project
?nance you have to think about the Principles if you
want to syndicate the loan.
[French EPFI, Interviewee 1]
The arrival of these late adopters signi?ed the Equator
Principles’ growing stature as the recognised standard or
norm for socially accountable project ?nance. They both
experienced and contributed to the emerging movement
towards EP adoption in the project ?nance ?eld as well
as having the advantage of being able to learn from and
benchmark themselves against the perceived ‘‘best prac-
tice’’ of existing EPFIs. Interviewees noted how the issue-
based ?eld – particularly the support of the EPFI move-
ment and the growing body of EP consultants – was, at this
stage, facilitating even greater information exchange and
capacity building around EP implementation. One intervie-
wee highlighted the extensive ‘‘body of knowledge and
body of practice’’ that he could draw on, which, he claimed,
was aided by the ‘‘collegial relationship between the vari-
ous Equator [EP] banks’’ thereby allowing him to ‘‘call on
others in other banks to get advice’’ when needed
(Dutch/Belgian EPFI, Interviewee 2).
The support for EP implementation within ?nancial
institutions increased further when, following an EPFI
meeting in Washington in May 2007, a brief guidance
document for reporting on EP implementation was pro-
duced. This proposed minimum requirements for report-
ing, suggestions on the extent of information disclosures,
44 N. O’Sullivan, B. O’Dwyer / Accounting, Organizations and Society 43 (2015) 33–55
and formats for data presentation. In addition, working
groups focused on discussing EP loan documentation pro-
cesses, governance issues, and NGO engagement were
either newly formed or became more formalised thereby
further increasing the level of collective EPFI action on EP
diffusion.
Evolving issue-based ?eld contestation and structuration
Despite some EP adopters’ individual efforts to imple-
ment the EP over the 2004–2007 period, active EPFIs con-
cluded that certain EPFIs [termed ‘free riders’ by
BankTrack] were ‘‘exploit[ing] the Equator Principles as
some sort of environmental PR [public relations] mecha-
nism’’ (UK EPFI 1, Interviewee 1). These included EPFIs
who claimed to have adopted the EP but had no project
?nance operations, were not involved in various EP issue-
based ?eld activities, and/or continued to ?nance highly
questionable transactions. Hence, as the total number of
EPFIs had risen to forty by 2007, the small number of
10–15 active EPFIs considered reconstituting the EP
requirements in order to better manage the relationship
between the EPFI movement ‘‘vanguard and tail’’ (UK
EPFI 1, Interviewee 1). A working group on EPFI govern-
ance at ?eld and organizational level was developed where
EPFIs decided that external reporting on EP compliance
should become the required EP membership condition.
These requirements were developed against the back-
ground of a BankTrack public assessment of EPFI reporting
which showed that of the EPFIs that had adopted the EP
before 2007 ‘‘40 per cent did not meet the[se] minimum
[reporting] requirements, [while] 19 per cent met them,
and 40 per cent exceeded them’’ (BankTrack, 2007a, p.1).
Hence, while the NGOs welcomed the EPFI movement’s
efforts to ?nally address some aspects of EP accountability
and governance, they were again dismissive of the new
reporting proposal, insisting that it represented ‘‘a very
minimal change’’ (BankTrack Coordinator). It was per-
ceived as a wholly inadequate way of addressing the EP
‘free-rider’ problem, especially as the reporting require-
ments were not stringent and, according to the
BankTrack Coordinator, ‘‘just basically put in writing what
ABN Amro and a few other banks [we]re doing already’’. In
general, the NGOs wanted much more information dis-
closed on banks’ clients, individual projects, and so-called
‘‘rosy deals’’ i.e. deals where the EP had been effectively
applied (to match the list of EPFI ‘‘dodgy deals’’ posted
on the BankTrack website).
The EPFIs, however, insisted, that, in the absence of
more formal accountability mechanisms ‘‘the [ultimate]
sanction [was] the bank’s reputation’’ (US EPFI).
Moreover, they diverted their attention towards develop-
ing a new EP management structure which came into
operation in early 2008 and marked a signi?cant departure
in the governance of the EP. This structure established a
steering committee comprising many of the original
‘‘group of ten’’ EPFIs and a set of seven working groups.
An EPFI Chair was formed to oversee the steering commit-
tee, working groups and engagement with the IFC, and a
more formal secretariat function was established to deal
with EP administration. These developments further
enhanced the sophistication of the emerging issue-based
?eld infrastructure.
A progression in EPFI social accountability: The EP ‘institution’
in 2008
By the ?fth anniversary of the EP in June 2008, there
were sixty adopting EPFIs and the Principles were widely
recognised as the ‘‘gold standard for sustainable project
?nance. . . [that had] . . . transformed the funding of major
projects globally’’ (EP Press Release, 2008a). For example,
it was estimated that in 2007, 71 per cent of the total debt
tracked in emerging markets was subject to the EP (EP
Press Release, 2008a). The EP had evolved into the project
?nance ‘‘institution’’, in?uencing the lending practices of
active EPFIs in the mature commercial bank project ?nance
?eld. The Principles were embedded into: the due diligence
carried out on a project (involving Principles 1, 2 and 3);
credit risk approval processes (Principles 4, 5 and 6); the
initial term sheet and loan documentation (Principle 8);
and the loan documentation over the life of a loan
(Principles 5 to 9 inclusive). They also increased the
EPFIs’ need to demonstrate some level of social account-
ability (Principle 10). For example, one EPFI interviewee
claimed that:
They [EP] are making differences in which decisions
[are made] [. . .] [Name of interviewee organization]
turn down transactions for non-Equator compliance. I
know other banks that have done the same thing. The
Equator Principles allow banks to get into discussions
with clients to try and change things.
[Dutch EPFI 1, Interviewee 1]
Several EPFI interviewees indicated that the EP had cre-
ated a much needed standardised framework for environ-
mental and social risk management for project ?nanciers;
where the EP had created a ‘‘community’’ of broad stake-
holders, and facilitated the common recognition and com-
munication of environmental and social issues within
project ?nance practice. This highlighted the increasingly
structured nature of the issue-based ?eld:
[There are] bene?ts to the bank and bene?ts to the cli-
ent, and Equator is now just part of the terminology, it
is part of the lexicon surrounding project ?nance. The
biggest success to me is not about the 54 banks that
have adopted it, it’s actually the fact that lawyers talk
about the Equator Principles and environmental consul-
tants talk about the Equator Principles, and the banks.
And now it’s [. . .] created a community and it’s made
it more ef?cient in terms of communication. As soon
as you say ‘Equator’ you should know what environ-
mental management standards we’re talking about.
[UK EPFI 1, Interviewee 1]
A maturing of the relationship between the NGO and
EPFI movements also emerged throughout the ?eld.
While their relationship had long been strained given their
competing rationales for socially accountable project
?nance, their mutual tolerance, respect and understanding
of each other had improved by 2008. Interviewees from
both NGOs and the EPFIs indicated that while signi?cant,
N. O’Sullivan, B. O’Dwyer / Accounting, Organizations and Society 43 (2015) 33–55 45
and often irresolvable, differences remained and con-
testation continued, they now recognised more opportuni-
ties for cooperation around the EP and broader
environmental and social policies and activities:
I think most of them [active EPFI representatives] want
the Equator Principles to be properly applied. But the
dilemmas of the individual project of?cer, who’s strug-
gling with [EP] requirements on the one hand, and the
need to sign the deal on the other, is a dif?culty [. . .]
[So] it was very much the effort of the banks to make
us more aware of their everyday problems, and I always
like to hear that, as it re?nes your thinking.
[BankTrack]
With respect to EPFIs’ environmental and social report-
ing, despite the NGOs’ continuing concerns, the level and
quality of EPFI transparency and disclosure regarding EP
implementation increased signi?cantly between 2003
and 2008. By 2008, the majority of EPFIs were meeting
the basic EP reporting requirements of Principle 10 – the
EPFI ‘‘membership’’ condition. Many EPFIs, and certainly
those interviewed for this research, went well beyond the
basic minimum reporting requirements to include varying
levels of information on key aspects of their EP imple-
mentation procedures. They also published case studies
on ‘‘dilemmas’’ regarding challenging or high pro?le pro-
jects and the stakeholder engagements associated with
these. EP leader organizations were at the forefront of this
EP-related disclosure thereby re?ecting a trend towards
greater, albeit selective, exposure of internal environmen-
tal and social policies and risk management approaches.
Discussion
The case narrative reveals how the NGO and Equator
Principles Financial Institution (EPFI) movements shaped
Equator Principles issue-based ?eld structuration through
their (re)construction of competing rationales and
mobilization of collective action and political and cultural
resources around their opposing notions of socially
accountable project ?nance. This structuration process
was predominantly controlled by the incumbent EPFI
movement and was iteratively and recursively linked to
the existing infrastructure (cultural, relational and opera-
tional systems) of the mature project ?nance ?eld.
The analysis unveils how, initially, individual and later
collective NGO campaigns drew public attention to the
adverse environmental and social implications of ?nance
sector lending activities. Throughout these campaigns
NGOs constructed a shared meaning system around ‘so-
cially accountable ?nance’, the rationale for which was
underpinned by a community-oriented environmental
and social logic. The NGOs’ collective approach strength-
ened their salience and their potential in?uence on the
?nance sector (King, 2008). In particular, it created uncer-
tainty in the parts of the commercial bank community
engaged in project ?nance causing key individuals in orga-
nizations that had been targeted by NGO campaigning to
question the adequacy of their existing risk management
frameworks. These incumbents theorized the need for
change and sought to reconstruct the existing rationale
for project ?nance by assimilating the NGOs’ community-
oriented environmental and social logic within the prevail-
ing market-oriented risk management logic underpinning
project ?nance (Thornton et al., 2012). To do so, they
enrolled their existing knowledge and experience with
environmental risk management to produce a draft set of
environmental and social principles for project ?nance,
and used their central, elite positions in the project ?nance
?eld to mobilize the additional political support necessary
to create the Equator Principles.
While the external NGO movement in?uenced the
initiation of the Equator Principles Financial Institution
(EPFI) movement within the project ?nance ?eld (see also,
Davis et al., 2008; Fligstein, 1996), it was ultimately unable
to mobilize suf?cient resources to ensure that its vision of
‘just ?nance’ prevailed. In particular, the absence of strin-
gent EP accountability mechanisms undermined its vision
of socially accountable ?nance. The EPFIs, given their
embeddedness in the mature project ?nance ?eld, saw
their priority as developing a set of ‘aspirational’ environ-
mental and social risk management guidelines which
would not threaten, and could even enhance, their com-
petitive advantage. These opposing NGO and EPFI move-
ment visions of what the EP could and should be led to
on-going interpretive struggles around the notion of
socially accountable project ?nance and proved central to
initiating the structuration of the EP issue-based ?eld.
The EP leaders’ theorisation of the EP into understand-
able and compelling formats through, for example, their
justi?cation of new EP norms and practices on pragmatic
economic grounds acted as an important EP diffusion
mechanism among early adopters (Zilber, 2006). The
Equator Principles Financial Institution (EPFI) movement
gradually emerged as a political–cultural force for EP diffu-
sion. It drew on the existing meaning systems and profes-
sional networks and channels of the extant project ?nance
?eld. For example, it embedded discussions of the EP into
the overarching risk management rationale of the mature
project ?nance ?eld and ensured that the EP could be
seamlessly embedded within existing credit risk analysis
processes.
Persistent contestation between the NGO and EPFI
movements regarding the interpretation of socially
accountable project ?nance was, however, a key character-
istic of the ?eld structuration process. Banktrack’s social
accountability demands were unrelenting and eventually
led to the EPFIs considering the necessity of EP external
reporting, and of engaging more directly with BankTrack.
BankTrack was, however, not powerful enough to persuade
the Equator Principles Financial Institutions (EPFIs) to
embrace highly stringent ?eld-level accountability mecha-
nisms in the revised EP (EP II). However, as this NGO-EPFI
contestation continued, the diffusion of the EP and the
simultaneous structuration of the EP issue-based ?eld con-
tinued apace. The normative movement toward EP adop-
tion in the project ?nance market became a key catalyst
for EP adoption by late adopters, in particular the nature
of the project ?nance syndication market in which ordinar-
ily competing banks cooperated. Given the nature of this
market, if ?nancial institutions failed to adopt the EP, the
46 N. O’Sullivan, B. O’Dwyer / Accounting, Organizations and Society 43 (2015) 33–55
issue-based ?eld formation would have continued to crys-
tallise without them thereby excluding them from project
?nance deals. Moreover, late adopters were able to utilise
the increasingly structured EPFI movements’ information
exchange and capacity-building channels at the issue-
based ?eld level to assist their EP implementation efforts.
Growth in EP adopters did, however, bring its own
problems, particularly in a context where efforts were
being made to get competitors to align around an agreed
interpretation of EP implementation. For the EP leaders,
the initial mobilization of the collective around the EP
was accompanied by the challenge of maintaining, co-
ordinating and governing this collective (see also, Dorado,
2005). Consequently, EPFI leaders developed, inter alia, an
EP governance working group and agreed that EPFI report-
ing would become the EP membership requirement from
2007 onwards, in particular to address a persistent EP
‘free-rider’ problem. By 2008, the EP issue-based ?eld
infrastructure had become increasingly sophisticated and
the EP were considered as the standard (institution) for
socially accountable project ?nance.
While BankTrack remained highly critical of the EPFI
movement’s market-oriented rationale and their limited
action regarding EPFI accountability, the mutual awareness
and respect between the EPFI and NGO movements
matured as the EP issue-based ?eld evolved. However, this
occurred in a context where normative contestation over
the nature of socially accountable project ?nance
persisted.
Theorizing issue-based ?eld structuration
The case analysis extends our understanding of
Hoffman’s (1999) conceptualisation of how issues, in par-
ticular sustainability-related issues, affect mature ?elds.
Drawing on this analysis, we now propose a model which
theorizes how issue-based ?elds evolve an institutional
infrastructure (see Fig. 1). Central to our model is that
issue-based ?elds evolve an institutional infrastructure –
common meaning, relational and operational systems –
based primarily upon the infrastructure of the existing
mature ?eld which they straddle. In our case, common
meaning systems comprise, inter alia: the rationale/logics
underpinning the EP; EPFI knowledge exchange about EP
experiences amongst EPFIs; and rationale/logics and
sense-making about EP revisions amid EPFIs. The common
relational systems include: the EPFI informal and formal
network amongst EPFIs; EPFI (group and individual) formal
and informal networks with clients; NGOs (the Banktrack
collective and the individual NGOs within it); and EP ‘pro-
fessionals’ such as lawyers and consultants. The common
operational systems encompass, inter alia: EPFI steering
committee work; EPFI (group) produced loan docu-
mentation and implementation guidance documents for
the EP; EPFI training programmes within individual
EPFIs; the integration of the EP into individual EPFI project
?nance processes; and individual EPFI reporting on EP
implementation.
Issue-based ?eld structuration processes are seen to be
heavily in?uenced and controlled by elite incumbents
occupying key positions within the existing mature ?eld
where the issue arises, or which it in?uences. When
mature ?eld disruption or uncertainty arises because of a
new issue of concern arising from outside the mature ?eld
– in our case, the issue of socially accountable ?nance
advocated by an external NGO movement – these central
actors use their powerful ?eld positions to address the
issue by instigating change that meets the conditions of
the mature ?eld. To achieve this, we propose that these
actors work most effectively as a collective (in our case,
as an internal movement) by engaging in the (re)construc-
tion of mature ?eld rationales and logics – for example, the
assimilation of a community-oriented environmental and
social logic into the market logic of the mature project
?nance ?eld – and the mobilisation of resources and col-
lective action surrounding the issue.
This issue-based ?eld structuration evolves in three key
phases. First, in order to theorize the issue, or ‘‘problem’’,
and to propose a legitimate course of action to address it,
the central actors in the mature ?eld enlist the prevailing
rationale and logic of the mature ?eld affected by the issue.
They then reconstruct this rationale by assimilating the
alternative ‘issue-logic’ advocated by external issue-actors,
such as NGO movements, into the prevailing logic of the
mature ?eld (Thornton et al., 2012). This facilitates the
establishment of new issue-related institutions (in our
case, the Equator Principles) aimed at driving some form
of institutional change and represents the ?rst stage of
the issue-based ?eld structuration process. This process
is distinct from institutional change common in mature
?elds, where the existing ?eld rationale(s) and logic(s)
often need to be replaced as opposed to reconstructed in
order to provoke substantive ?eld-level change (see,
Greenwood & Suddaby, 2006; Kitchener, 2002;
Lounsbury, 2002; Scott, Ruef, Mendel, & Caronna, 2000;
Suddaby & Greenwood, 2005).
Second, this reconstruction of rationale(s) and logic(s)
assists central actors in mobilising collective resources
and action through existing mature ?eld networks and
channels in order to diffuse new issue-related institutions
and practices amongst potential issue-based ?eld con-
stituents; thus making these actors the political–cultural
force for (issue) diffusion (Schneiberg & Lounsbury,
2008). These issue-related institutions and practices
simultaneously serve to initially appease those issue-re-
lated actors external to the mature ?eld promoting an
alternative rationale (Hardy & Maguire, 2008; Wooten &
Hoffman, 2008) as these actors perceive these institutions
and practices as indicative of an initial willingness to
address their key concerns. This represents the second
stage of the issue-based ?eld structuration process and
whilst it is somewhat similar to the ‘‘institutional
bricolage’’
14
that Maguire et al. (2004) argue occurs in the
structuration of emerging ?elds, we propose that issue-
based ?elds do not suffer to the same extent from the ‘‘liabil-
ity of newness’’ (Maguire et al., 2004) inherent in emerging
?elds. This is because, in our case, the EP issue-based ?eld is
predominantly based upon the deeply engrained cultural,
14
Bricolage represents ‘‘the creation of new practices and institutions
from different elements of existing institutions’’ (Levi-Strauss, 1966, cited
in Thornton & Ocasio, 2008, p.117).
N. O’Sullivan, B. O’Dwyer / Accounting, Organizations and Society 43 (2015) 33–55 47
Issue-Based Field:
Guiding institution: Issue-based
Infrastructure: Issue-related meaning, relational & operational systems
Occupants: Diverse issue-related actors
Core impact on: Mature field logics & practices
Less powerful
issue-related
actor rationales/
logics & action
Mature field central actors’:
reconstruction of established rationales/logics;
mobilization of collective action &
resources around the issue
Mature Field:
Established institution(s) & practices
Infrastructure: Established meaning, relational & operational systems
Occupants: Established members
(1)
(4)
(5)
(5)
(6) &(7)
(8)
(2) & (3)
Fig. 1. An issue-based ?eld structuration process.
Key to Fig. 1:
Arrows:
The complete arrow lines signify on-going direct and powerful in?uence.
The dotted arrow lines signify ?uctuating levels of direct and/or less powerful in?uence over time.
The direction of an arrow indicates the direction in which in?uence ?ows.
Numbers:
1. New ‘issue of concern’ arising from external movement outside the mature ?eld (‘less powerful issue-related actors’) and impacting on the mature ?eld.
2. ‘Mature ?eld central actors’ assimilate the ‘issue-logic’ underpinning the ‘issue of concern’ into the established rationales/logic(s) of the mature ?eld.
3. Mature ?eld central actors mobilize collective resources and action around the ‘issue of concern’ using the existing mature ?eld networks and channels.
This occurs simultaneously with 2. above.
4. Continual interpretive struggles occur around the ‘issue of concern’ between the mature ?eld central actors and less-powerful issue-related actors.
5. The combination of 2, 3, and 4 above initiates the issue-based ?eld structuration process which is underpinned by the establishment of a new issue-related
institution by mature ?eld central actors and an evolution in supporting practices. The emerging issue-based ?eld is initially subordinate to the mature ?eld.
6. Intensi?cation of formal and informal interactions between disparate powerful and less-powerful issue-related actors around the ‘issue of concern’. Competing
logics/rationales and the level of change the new issue-based institution is instigating are key sources of tension arising within the evolving issue-based ?eld.
7. Increased formalisation of the issue-based ?eld institutional infrastructure as the issue-related institution is diffused throughout the issue-based ?eld. Mature
?eld central actors largely control the progression of the issue-based institution and practices through, inter alia, formalised issue-coalitions or associations. Less
powerful issue-related actors exert some in?uence over these associations and practices, albeit on a ?uctuating basis.
8. The issue-based ?eld becomes less subordinate to the mature ?eld and iteratively in?uences mature ?eld logics and practices in an ongoing manner. However,
despite escalating mutual awareness and respect between mature ?eld central actors and less-powerful issue-related actors, enduring differences surrounding
the rationales/logics underpinning the issue, the issue-related institution, and the underlying practices may prevent more substantive change occurring in the
mature ?eld.
48 N. O’Sullivan, B. O’Dwyer / Accounting, Organizations and Society 43 (2015) 33–55
relational and operational systems and boundaries of the
underlying mature ?eld to which the issue relates. This implies
that the use of existing mature ?eld meaning systems,
networks and channels makes the legitimacy, diffusion
and enactment of new issue-based ?eld institutions and
practices easier than it would be in an emerging ?eld
where it is necessary to newly establish ‘‘clearly de?ned
leading actors, [. . .] a coherent discourse, structures of
cooperation and domination, sets of accepted norms, [and]
stable interorganizational relationships’’ (Maguire et al.,
2004, p.675).
Third, issue-based ?eld structuration crystallises
through the growth in diverse ?eld occupants and the
intensi?cation of their interactions. Issue-based ?eld mem-
bership is determined by actors’ subjective and wide-rang-
ing relationship with the issue and it is this identi?cation
with the issue that brings disparate powerful and less-
powerful actors into closer proximity than is likely in
mature or emerging ?eld structuration processes.
Interactions between some of these diverse ?eld members
(such as the NGO and EPFI movements), through formal or
less formal meetings, discussions and exchanges, are, at
least initially, contentious. This is due to their often com-
peting rationales regarding the issue, the nature and trajec-
tory of the new issue-related institution (in our case, the
Equator Principles), and the level of perceived change the
new issue-related institution is instigating in the underly-
ing mature-?eld logics and practice. While disparate actors
occupy the issue-based ?eld and interact more than they
would in mature ?eld settings, the hierarchical relation-
ships and power struggles existing between them (for
example, between the EPFI and NGO movements) as they
interact around the mature ?eld are mainly transferred to
the issue-based ?eld where powerful, central mature ?eld
actors largely control the progression of the issue-based
institution and practices through formalised issue-coali-
tions or associations (such as the EP Association). Such for-
malised forums become more sophisticated with an
increase in members from the mature ?eld as the new
issue-related institution (the Equator Principles) continues
to be diffused amongst them and they establish coordi-
nated work programmes, management and governance
systems. Less powerful actors external to the mature ?eld
to which the issue relates (such as NGO movements) can
in?uence these forums through, for example, their advo-
cacy for certain content or structural developments to
the emergent issue-institution. However, our case suggests
that this in?uence ?uctuates over time and can often be
limited due to resource constraints. Ultimately, continuous
interaction and openness can lead to mutual awareness
and respect developing between competing powerful and
less powerful issue-based ?eld actors as they learn about
each other’s activities and challenges. This creates the
potential for more collaborative as opposed to combative
interactions. Nevertheless, on-going disparity and tension
between their respective rationales surrounding the issue
(socially accountable project ?nance), the issue-related
institution (the Equator Principles), and the practices
adopted prevents this mutual awareness and respect from
instigating more substantive change within the mature
?eld (the project ?nance ?eld).
Van Wijk et al. (2013) assert that the ambiguity of an
issue, especially new sustainability-related issues, may
contribute to the likelihood of more collaborative work
between mature ?eld incumbents and less powerful com-
peting external movements in ?eld structuration pro-
cesses. However, our analysis suggests that the newness
or ambiguity of an issue (such as socially accountable pro-
ject ?nance) may actually facilitate a certain level of cap-
ture of the issue by powerful mature ?eld incumbents
who possess the necessary resources to develop issue-
based institutions and practices which predominantly suit
the rationale and logics of the mature ?eld to which the
issue relates. This can accentuate the combative nature of
external and internal movement interactions in issue-
based ?eld structuration processes. Whether primarily
combative or collaborative, we contend that such ongoing
moves and counter-moves between less-powerful and
powerful issue-related actors continuously shape issue-
based ?eld structuration and the institution(s) it supports.
Our case analysis indicates that issue-based ?eld struc-
turation is recursively linked with the underlying mature
?eld, with existing cultural, relational and operational
‘pre-conditions’ not just in?uencing the initial stages of
issue-based ?eld structuration – as may be the case with
emerging ?elds (Maguire et al., 2004) – but on a continual
basis. In turn, we view the issue-related institution (the
Equator Principles), and the meaning, relational and opera-
tional systems supporting it at issue-based ?eld level as
iteratively in?uencing, to varying degrees, mature ?eld
logics and practices (in our case, those associated with pro-
ject ?nance) on an ongoing basis. Furthermore, we con-
sider the issue-based ?eld as being ‘‘vertically’’ related, or
subordinate, to the more authoritative mature ?eld (see,
Fligstein & McAdam, 2011), certainly in the initial stages
of issue-based ?eld structuration. However, we propose
that both ?elds develop a more ‘‘horizontal’’ (Fligstein &
McAdam, 2011), or mutually dependent, relationship over
time as the issue (socially accountable project ?nance) –
and its related institution (the EP) – become more fully
accepted and assimilated into mature ?eld logics and
practices.
This model of issue-based ?eld structuration could be
adapted to other studies that seek a nuanced, contextual
understanding of how sustainability-related issues, such
as sustainable/socially accountable agriculture, forestry,
?shery, mining, and tourism, affect and are affected by
the mature ?elds to which they relate. It could also be
mobilized to examine how separate ?elds can develop
around sustainability-related issues, bringing disparate
issue-related actors together in cultural, relational and
operational contexts that develop issue-related institu-
tions (e.g. standards, codes of conduct) that directly in?u-
ence how the issue is interpreted and acted upon in the
mature ?eld, while at the same time being iteratively and
recursively in?uenced by the infrastructure of the mature
?eld over time. This accentuates the potential of ?eld-level
research to investigate ?elds as ‘‘sites where problems of
organizing are debated among disparate actors [and is]
integral to understanding how organizations construct
solutions to the problems of the twenty-?rst century’’
(Wooten & Hoffman, 2008, p.143).
N. O’Sullivan, B. O’Dwyer / Accounting, Organizations and Society 43 (2015) 33–55 49
Conclusions
This paper has studied why and how commercial banks
began to integrate sustainability issues into their project
?nance operations and the impact this had on the mature
commercial bank project ?nance ?eld and on commercial
bank social accountability. It speci?cally examined the role
of a non-governmental organization (NGO) movement
external to the project ?nance ?eld and an incumbent
commercial bank movement within this ?eld in the devel-
opment of the Equator Principles (EP) and the structura-
tion of the EP issue-based ?eld (Hoffman, 1999). In
particular, we evidenced how the con?icting, collective
rationales and actions of both the NGO and commercial
bank movements surrounding the issue of socially
accountable project ?nance acted as the basis of EP
issue-based ?eld structuration, and how this contentious,
political process enhanced, rather than constrained, adopt-
ing Equator Principles Financial Institutions’ (EPFIs’) social
accountability.
The study makes a number of contributions to the
literature. First, it presents a unique account of the struc-
turation of an issue-based ?eld. Our focus advances
Hoffman’s (1999) conceptualisation of issue-based ?elds,
as we evidence and theorize how and why these ?elds
evolve an institutional infrastructure. We proposed a
model of issue-based ?eld structuration which can be
mobilized to inform future research into how sustainabil-
ity issues impact on, and are impacted by, diverse mature
?elds. Second, we develop prior work examining the
institutionalization processes surrounding the develop-
ment of corporate social reporting and accountability. We
unveil how environmental and social risk assessment
became a key part of credit risk analysis in project ?nance,
and how this risk assessment process came to be exter-
nally reported on as part of a collective (and individual)
commercial bank effort to encourage environmental and
social due diligence and socially responsible decision mak-
ing in project ?nance. Speci?cally, we illustrate how the EP
issue-based ?eld structuration process originated and pro-
gressed the production of accounts of banks’ efforts to
categorise, quantify, monitor and avoid (where possible)
environmental and social risks. This develops our compre-
hension of the in?uence of ?eld-level institutionalization
processes on the evolution of corporate social and environ-
mental reporting practices. We extend Archel et al.’s
(2011) insights into the role of activist stakeholders in
the structuration of ?elds focused on corporate social and
environmental responsibility and reporting. Archel et al.
(2011) contend that activist groups who engage in institu-
tional processes aimed at improving corporate account-
ability are likely to be conditioned by these processes,
thereby gaining only second-order concessions. While we
found evidence of second-order concessions from the
EPFI movement, we also discovered a continual progres-
sion in these concessions as NGO movement engagement
deepened throughout the issue-based ?eld formation pro-
cess. This highlights the importance of unpacking the nat-
ure of second-order concessions in order to reveal the
extent of change, and of not automatically dismissing
apparently non-radical concessions as insigni?cant.
Overall, while elements of our analysis concur with
Archel et al.’s (2011) and Cooper and Owen’s (2007) con-
cerns about the limited potential for civil society actors
such as NGOs to shift corporate social responsibility (and
reporting) in a more challenging direction, we considerably
nuance their conclusions by unveiling how the NGO move-
ment in?uenced a progression in the attention afforded to
these issues in a highly conservative industry sector.
Third, we advance the literature on the impact of exter-
nal and internal movements on institutional change and
?eld structuration (e.g. Fligstein, 1996) by studying the
role of NGO and Equator Principles ?nancial institution
(EPFI) movements in the Equator Principles issue-based
?eld structuration process. In particular, we unveil how
the nature of the issue fuelling movement activity in?u-
ences these processes. In contrast to Van Wijk et al.’s
(2013) contention that the ambiguity of an issue may con-
tribute to more collaborative work between mature ?eld
incumbents and less powerful external movements in ?eld
structuration, we propose that the newness or ambiguity
of an issue (such as socially accountable project ?nance)
may actually facilitate a certain level of, albeit far from
complete, capture of the issue by powerful ?eld incum-
bents who possess the resources necessary to develop
issue-based institutions and practices designed to pre-
dominantly suit their preferred rationale and logics.
A number of limitations along with related opportuni-
ties for future research arise from this study. First, we pre-
dominantly unveil the contentious nature of (social)
movement interactions in issue-based ?eld structuration,
but there could also be more explicitly collaborative efforts
involved (see, Van Wijk et al., 2013). While we unveil
some, albeit limited, evidence of collaboration in the later
stages of our case, future research could explore how
intense collaborations between external and internal
movements can shape issue-based ?eld structuration in
order to advance our theorizations of how collaborative
relationships may shape issue-based ?elds. Of particular
interest would be the collaborative conditions under which
alternative logics come to dominate, are assimilated, or are
ignored (Thornton et al., 2012) as the institutional infras-
tructure of an issue-based ?eld is constructed. Work of this
nature could also explore how, and the extent to which,
external movements who collaborate extensively with
internal movements become embedded in the evolving
issue-based ?eld institutional infrastructure as it evolves
and matures. Within these extensive collaborations the
extent to which ‘issues of concern’ come to impact upon
the logics and practices pervading the mature ?eld to
which the issues relate could be compared with our ?nd-
ings. This would extend and develop our theorization of
issue-based ?eld structuration to more explicitly collab-
orative efforts between external and internal movements.
Such a focus would also respond to Lee and Lounsbury’s
(2015) recent call for an enhanced understanding of how
movements usher new logics into ?elds and ‘‘provide an
infrastructure as well as a legacy of beliefs and practices
that enable logics to endure’’ (p. 17).
The issue-based ?eld we study speci?cally focuses on
project ?nance activities in the mature commercial bank
?eld, but there are other commercial bank activities that
50 N. O’Sullivan, B. O’Dwyer / Accounting, Organizations and Society 43 (2015) 33–55
could also be addressed beyond project ?nance. For exam-
ple, it is possible that the creation of the EP issue-based
?eld and the infrastructure underpinning it could facilitate
broader consideration and reporting of other major
environmental and social issues by commercial banks in
their lending activities beyond project ?nance. In effect,
the EP issue-based ?eld could act as a catalyst, facilitating
the creation of other, parallel, issue-based ?elds around
further key social and environmental issues impacting
the commercial banking sector. For example, the issues
of human rights and climate change have both become
important topics that frequently dominate project
?nance/EP as well as broader commercial lending due dili-
gence processes. This has resulted in efforts to better
acknowledge and clarify the EPs’ role with respect to both
of these issues in the recently released third version of the
EP – EP III – along with the emergence of individual human
rights and climate change policies for broader commercial
lending activities. Future research could explore the role of
the EP issue-based ?eld, in ‘facilitating’ the development of
a human rights issue-based ?eld, or a climate change
issue-based ?eld, existing alongside the existing EP issue-
based ?eld. It would be intriguing to uncover the process
through which the structuration of these potential parallel
?elds draw on the existing EP issue-based ?eld, and how
they evolve and relate to the existing mature project
?nance ?eld and broader mature commercial bank ?eld.
Given that we have focused on examining ?eld-level
processes, we have not afforded detailed attention to the
micro-level practices that evolved within individual banks,
in particular how their internal accounting and external
reporting processes were developed as the EP issue-based
?eld evolved. Future work should pay more explicit atten-
tion to the institutionalization processes at the organiza-
tional level in order to better explain and understand
these processes. This call is consistent with Greenwood,
Hinings, and Whetten’s (2014) recent request for more
studies examining how ?eld-level change in?uences actual
organizational behavior and related change. In particular,
we need to know more about the extent to which, and
the processes underpinning how, the competing institu-
tional logics we observed in this case were actually assimi-
lated at the organizational level (see, for example, Lee,
2015). Moreover, studies conducting comparative analyses
of the nature and extent of change within commercial
banks’ project ?nance credit risk analysis should help us
to better understand the possibly heterogeneous responses
of individual banks to the introduction of the EP, and the
factors that account for any potential differences.
While this paper privileges the perspectives of Equator
Principles Financial Institutions (EPFIs) and NGOs, given
their overriding in?uence on the process studied, it pays
less attention to the perspectives of wider Equator
Principles stakeholders such as affected communities, pro-
ject ?nance clients, consultants, lawyers, and socially
responsible investors. Researchers also need to seek out
broader Equator Principles stakeholder perspectives on
their experiences of the evolution of the EP, and EP issue-
based ?eld structuration subsequent to 2008, especially
those of EPFI clients. Finally, we are conscious of the fact
that the Equator Principles apply to a small proportion of
overall commercial bank lending activities and that, while
we have argued that they have had some positive in?uence
on EPFI social accountability, in the aftermath of the global
?nancial crisis, the issue of ?nancial institution social
accountability has taken on even greater signi?cance.
Future studies could therefore explore the implications of
the crisis for both current and future regulatory or policy
developments impacting on ?nancial institution social
accountability.
Acknowledgements
We would like to gratefully acknowledge the signi?cant
assistance of all of the interviewees who participated in
this study. We would also like to acknowledge the highly
helpful comments we received on earlier drafts of the
paper from the following individuals: Mary Canning,
David Cooper, Matthew Egan, Yves Gendron, George
Georgakopoulos, Matthew Hall, James Hazelton, Aziza
Laguecir, Bernard Leca, Jeffrey Unerman, and Charlene
Zietsma. We also received very helpful feedback from par-
ticipants at the following conferences and research semi-
nars: the Jill McKinnon Research Seminar Series,
Department of Accounting and Corporate Governance,
Macquarie University, March 2015; the 30th European
Group for Organizational Studies (EGOS) Colloquium,
Rotterdam School of Management (RSM), Erasmus
University, July 2014; the Alternative Accounts
Conference, Schulich School of Business, York University,
Toronto, April 2013; and the Bordeaux Management
School (BEM) Seminar Series, Bordeaux, France, March
2012. The comments of both reviewers were of great assis-
tance in helping us to develop and improve the paper. The
?nancial support of the KPMG Netherlands
Wetenschapscommissie is warmly appreciated.
Appendix A. List of acronyms
CSR Corporate Social Responsibility
CRBM Campagna per la Riforma della Banca
Mondiale
EP Equator Principles
EPFI Equator Principles Financial Institution
E&S Environmental and Social
FI Financial Institution
FOE Friends of the Earth
IFC International Finance Corporation
IRN International Rivers Network
NGO Non-Governmental Organization
OECD Organization for Economic Cooperation and
Development
RAN Rainforest Action Network
SPE Special Purpose Entity
WWF World Wildlife Fund
N. O’Sullivan, B. O’Dwyer / Accounting, Organizations and Society 43 (2015) 33–55 51
Appendix B. The differences between EP I and EP II
Issue Equator Principles I Equator Principles II
Eligible Parties Equator Banks Equator Principles Financial Institutions
(EPFIs)
Financial Threshold $50M US $10M US
Object of Assessment (Principle 1) Projects only Projects plus expansions and upgrades of
projects if the environmental and social
impact of the expansion or upgrade is
signi?cant
Scope of Activities (Principle 1) Lending Lending plus advisory activities
Scope of Assessment (For
category A and B projects)
(Principle 1 & 2)
Environmental assessment (EA)
only
Environmental assessment plus social
assessment (SEA)
Streamlining Assessment
(Principle 3)
No requirement Adopts a streamlined approach to
assessment of environmental and social
impacts to principally High-Income OECD
countries, where high standards for assessing
environmental and social impacts and IFC
performance standards and EHS Guidelines
exist
Action Plan and Management
System (Principle 4)
Environmental Management Plan
(EMP) for A and where appropriate
B projects
Action Plan (AP) and Management System for
A and B projects
Consultation (For category A and
where appropriate category B
projects) (Principle 5)
In a structured and culturally
appropriate way with project
affected groups. Aim for broad
community support for projects. EA
and EMP to take account of
consultations
In a structured and culturally appropriate
way with project affected communities. Prior
informed consultation (not prior informed
consent) for projects with signi?cant adverse
impacts. Consultation process and results to
be documented in AP
Grievance Procedures (Principle
6)
No requirement New requirement for borrower to establish
grievance procedure for project affected
communities throughout the project life
cycle
Independent Expert Review
(Principle 7)
EA, EMP and consultation for
category A projects
SEA and AP compliance and consultation for
category A and where appropriate category B
Legal Compliance Covenants
(Principle 8)
No requirement New requirement for borrower to comply
with local, state and host country
environmental and social laws, regulations
and permits in all material respects
Action Plan Compliance Covenant
(Principle 4 & 8)
Borrower to comply with EMP Borrower to comply with AP (where
applicable) in all material respects
Reporting Compliance Covenant
(Principle 8)
Borrower to provide regular reports
on compliance with EMP
Borrower to provide regular reports of
compliance with AP and host country laws,
regulations and permits
Decommissioning Covenant
(Principle 8)
Borrower to decommission
facilities in accordance with
decommissioning Plan, where
applicable
Same as EP I
Remedial Steps to Remedy
Covenant Breach (Principle 8)
Lender to engage with borrower to
remedy non-compliance with
covenants if borrower in default
EPFI reserves rights to exercise remedies for
non-compliance or default; and discretion to
work with borrower re covenant compliance
Appointment of Independent
Expert (Principle 9)
Lender discretion to appoint
independent environmental expert
to provide additional monitoring
and reporting services
EPFI to require appointment of independent
environmental and/or social expert, or
borrower to retain quali?ed and experienced
external experts to verify its monitoring
information for EPFIs over life of loan
Annual Reporting Obligations
(Principle 10)
No requirement New requirement for at least annual
reporting by EPFI
52 N. O’Sullivan, B. O’Dwyer / Accounting, Organizations and Society 43 (2015) 33–55
Appendix C
Code type Code name Explanation
Sample of Initial Interview Analysis Coding (1)
Core codes ACC Accountability
CD Collevecchio Declaration
EP I Equator Principles I
EP II Equator Principles II
EPFI Equator Principles Financial Institution
FI-NGO REL Financial institution-non governmental organization relationships
HIS History/background/interviewee role & responsibilities
INS Institutional (theory)
LEG Legitimacy
OC Organizational change
PF Project ?nance
RM Risk management
STK Stakeholder (originally referring to NGOs)
VOL Voluntary (versus regulation)
Sample of sub-codes (For) ACC Accountability
ACC/CC Commercial con?dentiality
ACC/DEF De?nitions (overlap with ACC/EPFI & ACC/NGO)
ACC/EPFI EPFI opinions on (EP) accountability (overlap with EP/ACC)
ACC/L Leaders
ACC/NGO NGO opinions on (EP) accountability (overlap with EP/ACC)
ACC/MON Monitor (as opposed to ‘‘felt responsibility’’)
ACC/RES Responsibility
ACC/TRANS/DIS Transparency, Disclosure
(For) PF Project ?nance
BPF Beyond project ?nance
PFM Project ?nance market (pressures/in?uence, overlap with EP/PF later)
(For) EP Equator Principles (I & II)
EP/ACC Accountability
EP/AD Adoption (objectives, etc.)
EP/BEN Bene?ts
EP/CAT Catalyst (overlap with BPF)
EP/GOV Governance (re structural requirements of the Principles & EPFI network/
members)
EP/IMP Implementation (guidelines, policies, training, ‘‘departments’’, structural
changes, actors, internal implementation audits, etc.)
EP/PF Project ?nance market (link PFM) & process (internal EPFI PF stages & EP
integration; lawyer & external consultant assistance; client implementation
& assessments, etc.
EP/R Revision of EP I
EP/S Scope (re design for ‘just project ?nance’, etc.)
EP/STR Structure (requirements, some overlap with EP/S & EP/ACC)
(continued on next page)
N. O’Sullivan, B. O’Dwyer / Accounting, Organizations and Society 43 (2015) 33–55 53
Appendix C (continued)
Code type Code name Explanation
(For) EPFI Equator Principles Financial Institutions
EPFI/C Clients (interaction/relationships, overlap with AG)
EPFI/Con Consultants (interaction/relationships, overlap with AG)
EPFI/LW Lawyers (interaction/relationships, overlap with AG)
(For) OC Organizational Change
OC/AG Agents/champions
OC/CUL Culture (re EPFIs)
OC/STR Structure (re EPFIs, merged into e.g. EP/IMP, EP/BEN later)
OC/BAR Barriers (overlap with OC/CUL and merged into e.g. ACC/CC later)
(For) RM Risk Management
RM/BUS Business case (for EPFIs)
RM/C Core risk management (i.e. credit, as opposed to just E&S)
RM/Com Competition (between EPFIs)
RM/E&S/EP E&S risk management & relationship with EP
(For) STK Stakeholders
STK/AD Advocacy (NGO campaigns)
STK/CC Campaign changes
STK/E Engagement
STK/R/P Role & power
STK/RD Reputational damage
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doc_605498470.pdf
This paper presents a longitudinal case study examining why and how commercial banks
sought to integrate sustainability issues into their project finance operations between 2003
and 2008. We study the evolution of a set of influential environmental and social risk management
guidelines for project finance – the Equator Principles (EP) – and the simultaneous
structuration of a field around these guidelines focused on the issue of socially accountable
project finance. The case is theoretically framed using Hoffman’s (1999) concept of an
issue-based field and associated conceptualisations of the role of internal and external
(social) movements in the structuration of these fields.
The structuration of issue-based ?elds: Social accountability,
social movements and the Equator Principles issue-based ?eld
Niamh O’Sullivan
a,1
, Brendan O’Dwyer
b,?
a
Sustainalytics and University of Amsterdam Business School, The Netherlands
b
University of Amsterdam Business School, Plantage Muidergracht 12, 1018 TV Amsterdam, The Netherlands
a r t i c l e i n f o
Article history:
Available online 29 April 2015
a b s t r a c t
This paper presents a longitudinal case study examining why and how commercial banks
sought to integrate sustainability issues into their project ?nance operations between 2003
and 2008. We study the evolution of a set of in?uential environmental and social risk man-
agement guidelines for project ?nance – the Equator Principles (EP) – and the simultaneous
structuration of a ?eld around these guidelines focused on the issue of socially accountable
project ?nance. The case is theoretically framed using Hoffman’s (1999) concept of an
issue-based ?eld and associated conceptualisations of the role of internal and external
(social) movements in the structuration of these ?elds. The structuration of the issue-based
?eld studied is shown to encompass a dynamic, contested process involving extensive
interactions between a non-governmental organization (NGO) movement and a commer-
cial bank movement. We unveil how the con?icting, collective rationales and actions of
both movements fuelled the structuration process and facilitated an evolution in the social
accountability of commercial banks. While prior work sees little potential for civil society
actors to engage with and move corporate social responsibility and reporting in a more
challenging direction, we reveal how the NGO movement evoked a progression in social
responsibility and reporting in a sector that had previously shown little inclination to
address its wider social accountability. Drawing on our case analysis, we theorize how
issue-based ?elds cohere and crystallise, particularly how they build an institutional
infrastructure based upon the infrastructure of the mature ?eld which they straddle and
which the relevant issue impacts upon.
Ó 2015 Elsevier Ltd. All rights reserved.
Introduction
In the wake of the 2008 ?nancial crisis, the US
Government’s Financial Crisis Inquiry Commission indi-
cated that one of its main causes was a collapse in account-
ability among some of the world’s largest ?nancial
institutions. The Commission concluded that many indus-
try leaders were lulled into taking unwarranted risks that
ended up having devastating social consequences
(Economist Intelligence Unit, 2012; Roberts & Jones,
2009). As a result, increased scrutiny of ?nancial institu-
tions’ social licence to operate emerged, leading to escalat-
ing interest in examining their social accountability
(Hopwood, 2009; McSweeney, 2009). While the ?nancial
crisis highlighted the adverse direct social impacts of cer-
tain ?nancial sector activities, the sector’s core lending
and investment practices have long been seen to have indi-
rect social (and environmental) consequences, particularly
with respect to decisions to lend to or invest in entities
whose operations may have damaging impacts on society
and/or the environment (Scholtens, 2006, 2009).
Although efforts to consider social and environmentalhttp://dx.doi.org/10.1016/j.aos.2015.03.008
0361-3682/Ó 2015 Elsevier Ltd. All rights reserved.
?
Corresponding author. Tel.: +31 2 525 4260.
E-mail addresses: [email protected] (N. O’Sullivan),
[email protected] (B. O’Dwyer).
1
Tel.: +31 20 205 0045.
Accounting, Organizations and Society 43 (2015) 33–55
Contents lists available at ScienceDirect
Accounting, Organizations and Society
j our nal homepage: www. el sevi er. com/ l ocat e/ aos
impacts within lending and investment practices existed
prior to the ?nancial crisis (Coulson & O’Sullivan, 2014;
Dejean, Gond, & Leca, 2004; Scholtens, 2006, 2009), we
are limited in our understanding of the dynamics of these
processes, such as why and how these processes emerged,
how actors within and outside the ?nancial sector inter-
acted and in?uenced these processes, and the nature and
extent of the institutional change they effected. In particu-
lar, we know little about the extent to which such change
processes advanced social accountability in the ?nancial
sector.
This study attends to these change dynamics, and their
effects. It investigates why and how commercial banks
began to address sustainability issues in their ‘project
?nance’
2
operations from 2003 onwards and how this was
catalysed by non-governmental organization (NGO) cam-
paigns promoting socially accountable ?nance. It further
examines the effects these processes had on the project
?nance ?eld and on commercial bank social accountability;
particularly the evolution in the nature of commercial bank
reporting on their environmental and social risk assessment
processes. Speci?cally, we present a longitudinal case study
examining the evolution and adoption of the Equator
Principles (EP), a suite of environmental and social risk man-
agement guidelines for commercial banks’ project ?nance
activities. The Principles represent one of the most signi?-
cant social accountability initiatives to have emerged within
?nancial markets in the past decade. We examine the role of
an NGO movement operating outside the mature project
?nance ?eld and the role of a commercial bank movement
from within this ?eld in the structuration of a separate,
but related, ?eld focused on the issue of socially accountable
?nance – what we term ‘‘the Equator Principles (EP) issue-
based ?eld’’.
3
We simultaneously study how this process
in?uenced how commercial banks adopting the Equator
Principles (termed Equator Principles Financial Institutions
(EPFIs)) addressed their social accountability.
4
The case is
theoretically framed using Hoffman’s (1999) concept of an
issue-based ?eld and associated conceptualisations of the
role of internal and external (social) movements in the
structuration of ?elds formed around key issues.
Our analysis unveils how the con?icting collective
rationales and actions of the NGO and Equator Principles
Financial Institution (EPFI) movements regarding the issue
of socially accountable project ?nance shaped the Equator
Principles (EP) issue-based ?eld structuration process and
an ensuing evolution in EPFI social accountability.
5
We
offer a nuanced understanding of the dynamic, political
and contested interactions between NGO and corporate
movements in the structuration of (sustainability-related)
issue-based ?elds, especially in ?nancial markets (see, King
& Pearce, 2010), and of how these interactions in?uence
the construction of ‘‘new categories and standards of
accountability’’ (King & Pearce, 2010, p.260). Drawing on
our analysis, we theorize how issue-based ?elds cohere
and crystallise, particularly how they evolve an institutional
infrastructure based upon the infrastructure of the existing
mature ?eld which they straddle, and which the issue
impacts upon.
We make a number of theoretical and empirical con-
tributions to the literature. First, the extant literature pro-
vides rich agentic accounts of ?eld structuration which
emphasise the interplay between the notions of institu-
tional entrepreneur, (collective) rationality, logics, theo-
rization, framing and diffusion, resource mobilization,
collective action, and social movements in dynamic pro-
cesses of ?eld evolution and change (see, Hardy &
Maguire, 2008; Schneiberg & Lounsbury, 2008; Wooten &
Hoffman, 2008). However, this literature has predomi-
nantly focused on mature and emerging organizational
?elds (e.g. Dejean et al., 2004; Ezzamel, Robson, &
Stapleton, 2012; Greenwood & Suddaby, 2006;
Lounsbury, 2002; Purdy & Gray, 2009; Suddaby, Cooper,
& Greenwood, 2007), with analyses of issue-based ?elds
(Hoffman, 1999), and in particular how and why issue-
based ?eld structuration unfolds, remaining largely
neglected. We contend that our focus on issue-based ?elds
is important as it allows for a better understanding of how
issues, in particular sustainability-related issues (in our
case, the issue of socially accountable ?nance), affect and
are affected by mature ?elds (here, the commercial bank
project ?nance ?eld), and of how separate ?elds can
develop around speci?c issues yet continue to in?uence,
and be in?uenced by the mature ?elds they impact on.
Given the prominence of sustainability issues in con-
temporary societies and markets and the prevalence of a
wide-range of issue-speci?c corporate sustainability prin-
ciples, standards and codes of conduct throughout these
contexts, we contend that it is necessary to analyse the
emergence of such phenomena in depth in order to better
comprehend how sustainability issues are in?ltrating
mature (corporate) ?elds and affecting corporate social
accountability processes. Our analysis extends Hoffman’s
(1999) study of how the issue of corporate environmental-
ism was interpreted and addressed by the US chemical
industry and his theorisation of how ?elds develop around
issues as opposed to markets or technologies. Moreover,
2
Project ?nance is a method of funding in which the lender looks
primarily to the revenues generated by a single project, both as the source
of repayment and as security for the exposure to default. It can involve the
?nancing of the construction of a new capital installation, or the re?nancing
of an existing installation, with or without improvements. The borrower is
usually a Special Purpose Entity (SPE) which is not permitted to perform
any function other than developing, owning and operating the ?nanced
installation. As a consequence, the repayment depends primarily on the
project’s cash ?ow and on the collateral value of the project’s assets
(Equator Principles II, 2006).
3
‘‘An organizational ?eld is composed of sets of institutions and
networks of organizations that together constitute a recognizable area of
life’’ (Maguire, Hardy, & Lawrence, 2004, p.657). An issue-based ?eld is
formed around an issue, as opposed to common technologies or industries,
and brings disparate groups together (Hoffman, 1999). We view ?eld
structuration as an on-going, iterative process between ?eld institutions/
structures and agency which is re?ected in the nature of the inter-
organizational infrastructure (common meaning, relational and operational
systems) that arises at ?eld level (Scott, 2008). We elaborate on these
notions in the theoretical framing in the next section.
4
Equator Principles Financial Institutions (EPFIs) are ?nancial institu-
tions that adopted the Equator Principles. EPFIs also encompass all of those
?nancial institutions that were the initiators and original developers of the
Equator Principles (who also went on to adopt the Equator Principles).
5
Please refer to Appendix A for a list of the acronyms used throughout
the paper.
34 N. O’Sullivan, B. O’Dwyer / Accounting, Organizations and Society 43 (2015) 33–55
we advance Hoffman’s (1999) conceptualisation of issue-
based ?elds, as we theorize how and why they evolve an
institutional infrastructure.
Second, we progress prior work exploring the
institutionalization processes surrounding corporate social
reporting and accountability (see, for example, Archel,
Husillos, & Spence, 2011; Bebbington, Kirk, & Larrinaga,
2012; Cooper & Owen, 2007; O’Sullivan & O’Dwyer,
2009). The case illustrates how environmental and social
risk assessment became a component part of credit risk
analysis in project ?nance, and how this risk assessment
process came to be reported on as part of a collective
(and individual) commercial bank effort to encourage
environmental and social due diligence and socially
responsible decision making. In particular, we show how
the EP issue-based ?eld structuration process initiated
and advanced the production of accounts of banks’ efforts
to categorise, quantify, monitor and avoid (where possible)
environmental and social risks. This advances our under-
standing of the impact of ?eld-level institutionalization
processes on the evolution of corporate social and environ-
mental reporting practices. We develop the ?ndings of
Archel et al. (2011) regarding the relationship dynamics
that transpire in the structuration of a ?eld focused on
improving corporate accountability by extending and
nuancing their insights into the role of activist stakehold-
ers such as NGO movements in the structuration of this
form of ?eld. While aspects of our analysis concur with
Archel et al.’s (2011) questioning of the potential for civil
society actors to engage with and move corporate social
responsibility and reporting in a more challenging direc-
tion (see also, Cooper & Owen, 2007), we temper their con-
clusions by unveiling how a set of civil society actors (in
the form of an NGO movement) evoked a progression in
social responsibility and reporting in a sector that had pre-
viously shown little inclination to address its wider social
accountability.
Third, by unveiling the role of NGO and Equator
Principles Financial Institution (EPFI) movements in the
Equator Principles issue-based ?eld structuration process,
we extend the literature on the effects of external and
internal movements on institutional change and ?eld
structuration (e.g. Fligstein, 1996; Hensman, 2003;
Lounsbury, Ventresca, & Hirsch, 2003; Van Wijk, Stam,
Elfrong, Zietsma, & Den hond, 2013). In particular, we
advance aspects of Van Wijk et al.’s (2013) study of the
relationship between external movements and ?eld
incumbents in ?eld structuration processes by providing
insights into how the nature of the issue fuelling move-
ment activity can in?uence these processes. Van Wijk
et al. (2013) suggest that the ambiguity of an issue may
contribute to more collaborative work between mature
?eld incumbents and less powerful external movements
in ?eld structuration. However, while we reveal some col-
laborative efforts between the NGO and Equator Principles
Financial Institution (EPFI) movements, we ?nd that the
newness or ambiguity of an issue (such as socially account-
able project ?nance) allows for a certain level of capture of
the issue by powerful ?eld incumbents who possess the
necessary resources to develop issue-based institutions
and practices which predominantly suit their preferred
rationale and logics. This accentuates the combative as
opposed to collaborative nature of the interactions
between mature ?eld incumbents and less powerful exter-
nal movements in ?eld structuration processes.
The remainder of the paper proceeds as follows. The
next section introduces the theoretical framing adopted
in the study. The research methods are subsequently out-
lined before a narrative of the case analysis is presented.
This narrative traces the Equator Principles (EP) issue-
based ?eld structuration process between 2003 and 2008,
emphasising the co-evolution of the ?eld structuration
process with advances in the social accountability of ?nan-
cial institutions adopting the Equator Principles. The paper
proceeds to discuss the case analysis in the context of the
theoretical framing and proposes a model of issue-based
?eld structuration before concluding with some recom-
mendations for future research.
Theoretical context
In order to frame our analysis of the structuration of the
Equator Principles (EP) issue-based ?eld, we mobilize
Hoffman’s (1999) conception of issue-based ?elds along-
side associated conceptualisations of the role of internal
and external (social) movements in the structuration of
such ?elds. This framing serves as a sensemaking device
to focus our analysis and help develop our understanding,
communication and theorisation of the issue-based ?eld
structuration process (Ahrens & Chapman, 2006). Below,
we develop this framing by elaborating on the notion of
issue-based ?elds and the role of collective sets of actors
in the structuration of such ?elds.
Characterising issue-based ?elds
Organizational ?elds arise when organizations partake
of a common meaning system and increase inter-organiza-
tional activity, information exchange and mutual aware-
ness (Di Maggio & Powell, 1983; Hoffman, 1999; Scott,
2008). Issue-based ?elds are distinct from common con-
ceptions of organizational ?elds as they are ‘‘not formed
around common technologies or common industries, but
around issues that bring together various ?eld constituents
with disparate purposes’’ and interests (Hoffman, 1999, p.
352). Issues that become important to the interests and
objectives of a speci?c collective de?ne what the ?eld is,
making links that may not have previously been made.
Hence, an issue-based ?eld is not merely a collection of
in?uential organizations; it is the centre of common chan-
nels of dialogue and discussion where competing interests
continually negotiate over issue interpretation, and thus
the institutions that will guide organizational behaviour
(Hoffman, 1999). While not all ?eld constituents will
impact on negotiations over issue interpretation, this con-
tinual contestation and con?ict can result in a process
more akin to ‘‘institutional war than isomorphic dialogue’’
(Hoffman, 1999, p. 352) as ?elds become arenas of power
relations in which interpretive struggles are constantly
played out among a constellation of actors holding differ-
ent perspectives underpinned by competing logics
N. O’Sullivan, B. O’Dwyer / Accounting, Organizations and Society 43 (2015) 33–55 35
(Greenwood & Suddaby, 2006; Lounsbury, 2007; Wooten &
Hoffman, 2008). These characteristics render issue-based
?elds contested and dynamic in contrast to the settled
character commonly ascribed to organizational ?elds
(Wooten & Hoffman, 2008).
While organizations can claim to be part of an issue-
based ?eld or not, their membership is ultimately de?ned
through patterns of social interaction. Hence, if an organi-
zation chooses to disregard an emerging issue, for exam-
ple, the issue of socially accountable project ?nance
studied in this paper, others may crystallise the ?eld for-
mation process for them (Hoffman, 1999). This process is
often stimulated by social movement campaigns and/or
protests raising awareness of a new issue or offering alter-
native framings of an existing issue.
The role of internal and external (social) movements in issue-
based ?eld structuration
Hoffman’s (1999) conceptualisation of issue-based
?elds as socially constructed, dynamic and political spaces
is complemented by the social movement perspective as
this perspective accentuates the role that collective action
and contentiousness play in ?eld structuration processes
(King & Pearce, 2010). Social movement theory highlights
how actors work collectively to frame (societal) issues of
concern and mobilize collective rationality, resources
(which can be political, ?nancial, organizational, cultural
or symbolic) and action around these issues in order to
induce ?eld level change by altering embedded norms, val-
ues and practices (McCarthy & Zald, 1977; Misangyi,
Weaver, & Elms, 2008). Movements operate both within
and outside (or on the periphery of) existing ?elds
(Davis, Morrill, Rao, & Soule, 2008) and can have a pro-
found effect on ?eld structuration and change processes
(Lounsbury et al., 2003), especially those focused around
speci?c issues of societal concern such as corporate
accountability (Hoffman, 1999; Van Wijk et al., 2013).
Actors within movements (re)construct collective ratio-
nales for institutional change in order to gain legitimacy or
support for their preferred choice of action (Hardy &
Maguire, 2008; Schneiberg & Lounsbury, 2008). They
mobilize narratives, rhetoric and analogies – for example,
the publication of books, reports and media stories – to
help frame and theorize their vision of change (Etzion &
Ferraro, 2010; Greenwood & Suddaby, 2006). Sense-mak-
ing, interpretation, and the formulation of responses and
motivating actions regarding an identi?ed problem are
embedded in framing processes (Benford & Snow, 2000),
while theorization highlights the failings of existing norms
and practices and mobilizes understandable and com-
pelling formats to ‘‘justify. . . new norms and practices in
terms of moral or pragmatic considerations’’ (Dacin,
Goodstein, & Scott, 2002, p.48). Both framing and theoriza-
tion enable movements to ‘‘discredit the status quo and to
present the alternative practices they are championing as
necessary, valid and appropriate in ways that resonate
with other ?eld members’’ (Hardy & Maguire, 2008, p.
208).
Movements external to existing ?elds (external move-
ments) tend to challenge dominant institutions and
institutional arrangements. Given that individual actors
at the periphery of ?elds may lack resources and in?uence
(Hardy & Maguire, 2008), these external movements can
develop as a vehicle of collective action, or ‘‘an accumula-
tor of political power’’ (Schneiberg & Lounsbury, 2008,
p.664) by pooling individual peripheral actor efforts and
resources in order to better in?uence change within an
existing ?eld (Den Hond & De Bakker, 2007; King, 2008).
These ‘‘challenger’’ movements (Fligstein, 1996) often
adopt a con?ict-oriented character (but see, Van Wijk
et al., 2013) in order to disrupt, rede?ne or reframe existing
arrangements using protests, boycotts and direct action
aimed at dramatising perceived problems (Hoffman,
1999; King & Soule, 2007). By promoting an awareness of
certain problems, they seek to subvert the taken-for-grant-
edness of existing arrangements and evoke controversy
and debate within existing ?elds. This can provoke new
patterns of interaction among organizations revolving
around speci?c issues of concern or controversy (Soule,
2012).
Internal movements seek to instigate change from
within ?elds using established networks, resources and
power structures. In contrast to external movements they
‘‘may be more likely to err on the conservative side’’
(Schneiberg & Lounsbury, 2008, p. 660) by seeking to com-
bine proposed new practices with prevailing models and
arrangements in order to keep existing structures largely
intact (Fligstein, 1996). Their individual participants are
‘‘interest-driven, aware and calculative’’ (Greenwood &
Suddaby, 2006, p. 29) often occupying dominant ‘‘subject’’
positions as central actors within existing ?elds; thus pro-
viding the power and resources necessary to mobilize col-
lective institutional action (Maguire et al., 2004; Rao,
Monin, & Durand, 2003; Sherer & Lee, 2002). Internal
movements’ preference for incremental change means that
they often oppose the organized attempts by external
movements to change the extant institutional order (Rao,
Morrill, & Zald, 2000). In some cases, in theorizing and
enacting their (limited) vision of change they seek to
assimilate the competing institutional rationale and logics
of external movements within the prevailing logic (or
logics) of the existing institutional environment (see,
Thornton, Ocasio, & Lounsbury, 2012, pp. 165–167).
Hence, internal movements often mobilize ‘‘rival coalitions
of issue entrepreneurs’’ (Rao et al., 2000, p. 261) champion-
ing less radical frames of action. They enrol support by
using established networks and resources to diffuse alter-
native, less radical practices to those proposed by external
movements, and ‘‘[draw] on existing institutional elements
and models to craft new systems’’ (Schneiberg &
Lounsbury, 2008, p.656). In doing so, they become institu-
tional forces in themselves, acting as (political–cultural)
vehicles ‘‘for diffusion, theorization, recombination and
other institutional processes within ?elds’’ (Schneiberg &
Lounsbury, 2008, p.656).
Recent work suggests that collaborative efforts between
external, challenger movements and incumbents in mature
?elds have, in practice, been neglected as avenues to affect
?eld-level change (see, Van Wijk et al., 2013). Van Wijk
et al. (2013, p. 381) indicate that the nature of the issue
promoted by an external movement in?uences the
36 N. O’Sullivan, B. O’Dwyer / Accounting, Organizations and Society 43 (2015) 33–55
interplay between the external movement and incumbents
in the mature ?eld to which the issue relates. They contend
that ambiguous issues that are dif?cult to measure and
attribute allow more room for external in?uence on an
issue’s social construction. Issue ambiguity is seen to offer
more options for incumbent involvement in the social con-
struction of the issue and may facilitate collaboration
between external and internal movements. This collab-
oration, under certain conditions, is seen as potentially
leading to incremental as opposed to radical change in
the mature ?eld which the issue impacts upon.
Moreover, collaboration between external and internal
movements regarding an issue is deemed more likely
where legal, governmental and market pressures support
the external movements’ stance on an issue (Hoffman,
1999; Van Wijk et al., 2013).
We mobilize Hoffman’s (1999) issue-based ?eld con-
ception and (aspects of) social movement theory above to
examine the role played by internal and external (social)
movements in the structuration of an issue-based ?eld
centred around the EP. We seek to advance Hoffman’s con-
ceptualisation of issue-based ?elds by unveiling how and
why the EP issue-based ?eld structuration process evolved
an institutional infrastructure based upon the infrastruc-
ture of the mature project ?nance ?eld it straddled, and
which the issue of socially accountable ?nance impacted
upon. Drawing on our analysis we construct a theoretical
model of issue-based ?eld structuration and unveil how
the nature of the issue fuelling (social) movement activity
in?uences the impact of external and internal movements
on institutional change and issue-based ?eld structuration.
Prior to presenting this structuration process and
accompanying theorisation, the following section speci?es
the research methods we adopted.
Research methods
Research design and data sources
In order to gain an in-depth understanding of the com-
plexities underlying the Equator Principles (EP) issue-
based ?eld structuration process (and associated develop-
ments in Equator Principles Financial Institution (EPFI)
social accountability) we adopted a qualitative case-based
research approach (Cooper & Morgan, 2008). This drew on
twenty-eight semi-structured interviews conducted over a
three year period involving thirty individual interviews
with some of the most prominent actors associated with
the development and emergence of the Equator
Principles.
6
This was supplemented with an extensive
examination of the manifest (literal meaning) and latent
(deep structural meaning) content of public and private
publications relating to the development of the EP. The main
objective of the study was to capture, interpret and repre-
sent the EP issue-based ?eld structuration process drawing
on the meanings key actors brought to the process (Denzin
& Lincoln, 2000; Gephart, 2004).
The case study was conducted in two phases between
2006 and 2009. The ?rst phase was undertaken between
June and December 2006 and sought NGO perspectives
on how and why the EP were developed and how they
were being implemented, especially the extent to which
the process through which they emerged impacted on
how the Equator Principles Financial Institutions (EPFIs)
7
– the ?nancial institutions that adopted the Equator
Principles – addressed their social accountability. Semi-
structured interviews were conducted with nine senior
individuals from nine different NGOs that were members
of BankTrack, an international coalition of NGOs that has
closely monitored the development of the EP and the ?nanc-
ing activities of the EPFIs. These interviewees were purpo-
sively chosen due to their historical and ?rst-hand
knowledge of NGO campaigns surrounding ?nancial sector
investments with signi?cant social and environmental
impacts in the run-up to and following the launch of the
EP. Access to these interviewees was achieved through the
?rst-named author’s contact with one of the NGOs from
her previous work experience with UNEP-FI,
8
as well as
through the BankTrack Coordinator. The BankTrack
Coordinator was interviewed a second time in January
2008 to gain more up-to-date NGO perspectives on the man-
ner in which the EP had progressed since 2006. This sought
to capture the processual nature of the EP phenomenon and
NGO perceptions of this process as it emerged over the
2003–2008 period (see Table 1).
The second phase of the study was conducted between
May 2007 and April 2008. This enrolled a cross-section of
Equator Principles Financial Institution (EPFI) perspectives
on why and how the EP were created and implemented
between 2003 and 2008; and whether and if so, how, this
affected the social accountability of the EPFIs. Access to ten
different EPFIs was gained and included:
(1) Four ‘EP leader’ organizations, i.e. banks that were
directly involved in developing the EP and adopted
them when they were launched on June 4th, 2003.
They comprised one Australian EPFI, one Dutch
EPFI, one UK EPFI and one US EPFI.
(2) Three EP ‘early adopter’ organizations, i.e. banks that
adopted the EP between June and October 2003.
They comprised one (other) Dutch EPFI and two
(other) UK EPFIs; and
(3) Three EP ‘late adopter’ organizations, i.e. banks that
adopted the EP between November 2005 and
September 2007. They comprised one French EPFI,
one Dutch/Belgian EPFI and one South African EPFI.
The majority of interviewees from these EPFIs held
senior social and environmental risk management
6
These comprised senior representatives from the two key actors in this
process, the Equator Principles Financial Institutions (EPFIs) and NGOs, as
well as other actors including an EP lawyer, EP consultant and two mining
companies (an Australian gold mining company and a South African
platinum mining company receiving project ?nancing).
7
The EPFIs also encompass the ?nancial institutions who were the
initiators and original developers of the Equator Principles, all of whom
subsequently adopted the Principles.
8
UNEP-FI is the United Nations Environment Programme Finance
Initiative (UNEP-FI). This is a global initiative between UNEP and the
?nancial services sector addressing sustainable ?nance issues.
N. O’Sullivan, B. O’Dwyer / Accounting, Organizations and Society 43 (2015) 33–55 37
positions. A chief operating of?cer, worldwide heads of
sustainability, and executive and associate directors were
also interviewed. Four interviewees were interviewed in
one EPFI. In an additional EPFI two individuals were inter-
viewed separately, while in two other EPFIs two
individuals were interviewed together. Hence, while the
total number of EPFI organizations included in the study
was ten, the total number of individual interview meetings
was fourteen, and the total number of interviewees in
these fourteen meetings was sixteen (see Table 2).
Table 1
Non-Governmental Organization (NGO) interviewees.
Name of NGO Position of interviewee Location of
interview
Date Interview
duration
(min)
International Rivers Network (IRN) Policy Analyst Sussex, U.K. 11/06/2006 60
Friends of the Earth (FoE), US Program Manager, Green Investments
Project
Sussex, U.K. 11/06/2006 65
Rainforest Action Network (RAN)
a
Former Director, Global Finance Campaign Sussex, U.K. 11/06/2006 60
Friends of the Earth (FoE), Amazonia
a
Former Manager, Eco-Finance Project London 12/06/2006 60
Platform Researcher London 13/06/2006 75
Berne Declaration Head, Private Finance Programme Zurich 12/07/2006 90
Campagna per la Riforma della Banca Mondiale (CRBM) Co-ordinator Amsterdam 03/10/2006 60
WWF – UK
a
Former Global Policy Advisor Telephone
interview
09/10/2006 60
Friends of the Earth (FoE) Europe/International
(formerly FoE Netherlands/Milieudefensie
b
)
Coordinator, Corporate Campaign FoE
International and FoE Europe
Telephone
interview
04/12/2006 60
BankTrack Coordinator Utrecht,
Netherlands
11/01/2008 103
Key:
a
These interviewees had moved to new organizations following their interviews or after they had been approached for interview. However, they
indicated that the views expressed were representative of their experiences with the BankTrack member organizations in question.
b
Head of International Campaign on Globalisation and Environmental Issues at FoE Netherlands (Milieudefensie). This interviewee was involved in the
drafting of the Collevecchio Declaration.
Table 2
Equator Principles Financial Institution (EPFI) interviewees.
EPFI designation Position held by interviewee Location of interview Date Interview duration (min)
Dutch EPFI 1
a
Former Head of Sustainable Risk Management Amsterdam 22/05/2007 105
Interviewee 1
Australian EPFI Chief Operating Of?cer London 29/05/2007 75
Dutch EPFI 1 Head of Sustainability Worldwide London 29/05/2007 64
Interviewee 2 Follow-up phone call 07/09/2007 64
UK EPFI 3 Head of Group Policy & Risk Reporting London 30/05/2007 78
UK EPFI 2 Senior Manager, Sustainability Risk Management London 17/09/2007 82
UK EPFI 1 Head, Environmental Risk Management London 19/09/2007 98
Interviewee 1 Follow-up phone call 19/06/2009 60
Dutch EPFI 1 Executive Director Amsterdam 25/09/2007 92
Interviewee 3
Dutch EPFI 1 Head, Sustainable Risk Management Amsterdam 28/09/2007 51
Interviewee 4
South African EPFI Head, Governance & Sustainability Telephone Interview 11/12/2007 57
US EPFI Director, Environmental & Social Risk Management Telephone Interview 19/12/2007 42
French EPFI Head, Environmental Team, Capital Raising &
Financing
Paris 15/01/2008 52
Interviewee 1
French EPFI Secretariat, Sustainable Development Group
Interviewee 2
Dutch/Belgian EPFI Head, Environmental & Social Unit, Business
Development Section
Rotterdam 18/01/2008 61
Interviewee 1
Dutch/Belgian EPFI Senior Risk Analyst, Environmental & Social Unit
Interviewee 2
Dutch EPFI 2 Advisor, Environmental & Social Risk Management
Policy
Amsterdam 13/02/2008 61
UK EPFI 1 Associate Director, Investment Banking Division:
Mining & Metals Team
London 28/04/2008 76
Interviewee 2 Follow-up phone calls 25/11/2008 60
26/11/2008 38
Key:
a
Numbers included beside the Equator Principles Financial Institution (EPFI) organizational names (e.g. UK EPFI 1, 2, 3) sequence the date the particular
Equator Principles Financial Institution adopted the EP and not the sequence in which the interviewees were interviewed.
38 N. O’Sullivan, B. O’Dwyer / Accounting, Organizations and Society 43 (2015) 33–55
Prior to both the NGO and EPFI interviews, semi-struc-
tured interview guides were prepared comprising of ques-
tions that represented the core research themes or
constructs informing the study (Eisenhardt, 1989; Patton,
2002). These NGO and EPFI ‘‘master-guides’’ were supple-
mented with organizational-speci?c guides/questions for
each individual interview which were informed by com-
pany websites, reports, external media coverage and the
?rst-named author’s observations of and informal interac-
tions with some NGO and EPFI representatives at a number
of corporate social responsibility/sustainable ?nance con-
ferences and meetings over the course of 2005–2008.
Eight of the ten NGO interviews were conducted face-
to-face. The remaining two were conducted by telephone
due to scheduling clashes. Twelve of the fourteen EPFI
interviews were conducted face-to-face, while the inter-
views with the South African and US EPFIs were conducted
by telephone due to the geographical distance from the
researchers. In many cases there were numerous follow-
up emails and telephone calls with interviewees providing
further points of clari?cation that were required following
the interviews. All interviews lasted an average of one
hour, were recorded on a MP3 player with the consent of
the interviewees, and were fully transcribed for analysis
purposes.
Data analysis
Transcript data
In all phases of the research, interview transcripts were
?rstly carefully scrutinised while listening to the recorded
interviews in an effort to identify and correct any errors
that may have arisen during transcription. A set of codes
based on the main question constructs and sub-questions
contained in the interviews was then developed
(Huberman & Miles, 1994; Ryan & Bernard, 2003). These
comprised a mixture of data-driven and (initial) theory-
driven codes (Fereday & Muir-Cochrane, 2006) re?ecting
the key topics addressed in the interviews. The transcripts
were then re-read (in some cases several times, often
simultaneously re-listening to the interviews) and coded.
In the process, any additional issues or codes that may
not have arisen during the initial review of transcripts
were noted.
This descriptive coding assisted the cross-interview
analysis and identi?cation of core themes arising from
the interview data; which acted as the basis for the
descriptive analysis of the interviews that followed
(Patton, 2002) (see Appendix C for a sample of the initial
coding scheme). The transcripts (minus the code analysis)
were then sent to the interviewees via email for review
and approval. Speci?c areas of clari?cation or expansion
for interviewee attention were highlighted and in many
cases some post-interview questions that may have arisen
following the interviews or during the reading of the tran-
scripts were prepared. In certain cases, interviewees went
to great effort to edit and expand upon their individual
interview transcript, with some EPFI interviewees engag-
ing in telephone conversations to address follow-up ques-
tions. These conversations were also recorded and
transcribed.
Observational data
Observations based on the ?rst author’s experiences
while working at UNEP-FI and those arising from the docu-
mentary analysis were enrolled to supplement the inter-
view data analysis. For example, the UNEP-FI
observations provided key insights into the ‘psyche’ of
banks and NGOs; their perceptions of each other; how they
interacted; their differences of opinion on key issues
related to sustainable ?nance; the tensions these differ-
ences caused; their growing mutual awareness and respect
for each other despite the on-going tensions; and the roles
they played in public group forums while developing one-
on-one relationships behind the scenes regarding bank
policy development and other issues related to sustainable
?nance. These observations augmented the speci?c
insights gained during the in-depth interviews and were
supplemented with further observations made at a num-
ber of conferences where sustainable ?nance and/or the
Equator Principles were discussed by both bank and NGO
representatives.
Construction of case narrative
The ?nal interview transcripts were used in the further
identi?cation, or con?rmation, of the key themes emerging
in the interviews (see Appendix C). Such respondent val-
idation enhanced the credibility of the interview data
and the dependability of the research process (Huberman
& Miles, 1994; Patton, 2002). For this paper, these themes
were re-interpreted and framed drawing on the principal
concepts of: ?eld structuration processes; internal and
external (social) movements; and issue-based ?elds. Our
key focus was to ground these concepts in our empirical
analysis in order to investigate, understand and explain
the complexity of the data embedded in the key themes
(Edmondson & McManus, 2007). A number of revised,
interrelated overarching themes emerged from this re-in-
terpretation, and included, inter alia, NGO visions of
socially accountable (‘just’) ?nance; a shared NGO meaning
system – underpinned by a community-oriented environ-
mental and social logic; theorizing risk management;
assimilating competing logics; reconstructing rationales
and logics; incentivising incremental change; mobilising
collective action and cultural resources; internal and exter-
nal (social) movement consultation and contestation (over
social accountability); pooling resources and mobilising an
issue-based community; re?exivity among internal and
external (social) movements; cooperation among competi-
tors; governing an internal (social) movement; actor issue-
identi?cation; and capturing issue ambiguity.
9
The overall
analysis involved an iterative and re?exive interaction
between the above themes and the principal concepts in
order to inductively derive a case analysis focused on: (1)
the NGO activities that helped initiate the EP and in?uenced
the subsequent EP issue-based ?eld structuration process;
(2) how and why the EP and the EP issue-based ?eld struc-
turation process evolved; and (3) the effects of this process
on how the EPFIs addressed their social accountability.
This analysis was subjected to further scrutiny and
9
We would like to explicitly recognise the extensive assistance of the
two reviewers in assisting with the focus of our interpretation.
N. O’Sullivan, B. O’Dwyer / Accounting, Organizations and Society 43 (2015) 33–55 39
enrichment drawing on the broader documentary evidence
analysis and observational data.
Case contextualisation: Project ?nance and the Equator
Principles
Project ?nance has traditionally represented the most
visible and tangible environmental and social impact of
the ?nance sector due to its association with the ?nancing
of large, complex environmentally and socially sensitive
projects involving the installation of dams, power plants,
mines, and oil and gas pipelines in developing world and
emerging economies. The lender normally relies on the
revenues generated by a single project for repayment of
and security for the ?nance provided. For example, in the
case of the funding of a power plant, the lender is usually
paid solely or almost exclusively out of the money gener-
ated by the contracts for the facility’s output, such as the
electricity sold by the plant. The borrower is usually an
SPE (Special Purpose Entity) that is not permitted to per-
form any function other than developing, owning, and
operating the funded installation. Repayment therefore
depends primarily on the project’s cash ?ows and on the
collateral value of the project’s assets (Equator Principles
II, 2006).
Project ?nance deals are ?nanced by both debt and
equity. Depending on the project, more than one type of
debt provider may be involved. This can include a bank
syndicate, multilateral agencies (e.g. The World Bank,
International Finance Corporation (IFC) and regional devel-
opment banks), bilateral agencies (development agencies
and export–import ?nancing agencies) and/or Export
Credit Agencies (ECAs). Equity for projects is normally pro-
vided by the project sponsor(s) and may be supplemented
by equity raised in national and international capital mar-
kets (Esty & Sesia, 2005; Hoffman, 2008).
Syndication is a typical ?nancing structure for project
?nance as it spreads out the potential risks associated with
a project. An average project ?nance deal may have 10–15
banks involved in the syndicate, including the ‘‘lead arran-
ger’’. The lead arranger agrees with the client to underwrite
the loan and to sell the remaining amount to other ?nan-
cial institutions. This creates a syndication of banks that
purchase the loan and thus provide debt ?nancing for the
project. ‘‘Second tier banks’’, for example, smaller project
?nanciers or emerging market banks, normally make up
the majority of this syndicate of lenders.
The Equator Principles were designed as a set of volun-
tary environmental and social risk management guidelines
for project ?nance. Based on the then International Finance
Corporation (IFC) safeguard policies, ?nancial institutions
(FIs) were requested to apply the Principles in their execu-
tion and management of project ?nance deals of (origi-
nally) $50 million dollars and upwards. When ?nancing
(and later also advising on) a project, adopting ?nancial
institutions were speci?cally asked to: review and cate-
gorise projects as either ‘‘A’’ (high risk), ‘‘B’’ (moderate risk)
or ‘‘C’’ (low risk) as per IFC classi?cations; ensure an
environmental (and later social) assessment and manage-
ment plan for the project was developed; ensure adequate
community consultation was conducted; covenant the
borrower to meet Equator Principles’ requirements;
employ independent experts to monitor borrower compli-
ance; and work with borrowers to address any breaches of
compliance. By adopting the Equator Principles, ?nancial
institutions voluntarily committed to apply environmental
and social principles to the design, execution and manage-
ment of project ?nance loans and pledged not to engage
with or provide ?nance to clients who would not comply
with the Principles
10
.
Case analysis
Holding project ?nance to account: The emergence of an
external NGO movement
Throughout the 1990s, there was widespread pri-
vatisation of large-scale public infrastructure projects
(e.g. power plants, roads, ports and telecommunications)
in developing countries. Combined with the withdrawal
of World Bank lending, this led to a dramatic increase in
(Western) commercial bank ?nancing for these projects
(Wright, 2009) which were rife with adverse environmen-
tal and social impacts. A number of international NGOs
became concerned that this increased private sector
?nancing meant that ‘‘private banks [were] able to operate
in relative anonymity’’ (Rainforest Action Network (RAN)
interviewee,
11
) and were unconcerned about and unac-
countable for the large scale environmental and social
impacts of the projects they ?nanced. These NGOs wanted
environmental and social impacts integrated into and priori-
tised within commercial bank lending and investment deci-
sions. Drawing on their extensive knowledge base, they
commenced holding these banks to account for the environ-
mental and social impacts of their lending activities using
direct advocacy campaigning and strategic shareholder acti-
vism (O’Sullivan & O’Dwyer, 2009; Waygood, 2006).
Many of the early campaigns were led by individual
NGOs operating alone. These included Friends of the
Earth (FOE) US’s 1995 campaign against Merrill Lynch
and Morgan Stanley regarding their ?nancial links with
the Three Gorges Dam (Ethical Corporation, 2006), and
FoE Netherlands’ 1997 campaign against ABN Amro’s
?nancing of the Freeport McMoRan/Rio Tinto gold and cop-
per mining project in West Papua, Indonesia (Steen, 2008).
One of the most successful campaigns was The Rainforest
Action Network’s (RAN) sustained four-year attack on
Citigroup which began in 2000. RAN was highly critical
of Citigroup’s funding for destructive fossil-based projects
(Wright, 2009) and launched customer boycotts against
Citigroup in the US. Between 2000 and 2001, FoE
Netherlands and Greenpeace Netherlands also led a highly
visible campaign against Dutch banks involved in palm oil
plantations in Indonesia. The campaign led to signi?cant
media coverage and a letter writing/post card campaign
attacking these banks, which many NGOs believe
10
The EP have been subject to two revisions since their inception. The
most recent revision process occurred between 2011 and 2013 and
culminated in the launch of what was called EP III in June 2013.
11
Please see Table 1 for details of the NGO interviewees.
40 N. O’Sullivan, B. O’Dwyer / Accounting, Organizations and Society 43 (2015) 33–55
in?uenced ABN Amro and four other Dutch Banks (FMO,
Fortis, ING and Rabobank) to develop forestry policies for
clients active in these sectors (FoE Netherlands/Europe
interviewee).
In 2002, in an effort to coordinate this escalating, but
somewhat disparate campaigning, a global coalition of
NGOs – including CRBM, FoE Netherlands, FoE US, The
Berne Declaration, RAN and WWF-UK – pooled their politi-
cal and cultural resources and congregated in order to
develop a collective set of formal demands for the ?nancial
sector known as ‘‘The Collevecchio Declaration’’. Launched
in January 2003, the Declaration outlined various commit-
ments for the incorporation and prioritisation of environ-
mental and social concerns into all ?nancial operations,
including commitments to sustainability, responsibility,
accountability and transparency. The proposed policies
and procedures were aimed at signi?cantly broadening
?nancial institutions’ (FIs’) risk management practices to
ensure enhanced consideration of environmental and
social issues (BankTrack, 2004b). The Declaration called
upon FIs to take immediate steps to implement the com-
mitments in order to ensure that they retained their ‘‘social
licence to operate’’; a licence the NGOs claimed was under
threat as ‘civil society’ was increasingly questioning FIs’
social accountability. Essentially, the Declaration explicitly
framed what the NGO collective believed socially account-
able ?nance should represent. This collective vision was
underpinned by the adoption of agenda-setting rhetoric
mobilising the notion of ‘just ?nance’, the rationale for
which was underpinned by a community-oriented
environmental and social logic:
I think there was the need for us [NGOs] at the time
. . . to get out ahead of the banks in terms of what our
vision of ‘just ?nance’ was, so that we could then
begin to cross the road there. You know there’s
always a risk in plotting the road by walking it
because then we’re adhering our own vision to what
the banks think is possible. And actually, I think the
Collevecchio Declaration [was] instrumental in setting
the goalposts.
[Rainforest Action Network (RAN) interviewee]
Theorizing and mobilising resources and action: The advent of
the internal Equator Principles Financial Institution (EPFI)
movement
The sustained intensity of NGO campaigning, now for-
mally framed within the demands of the Collevecchio
Declaration, was widely viewed as having tarnished the
reputations of targeted ?nancial institutions (FIs) while
increasing the risk of litigation against them due to some
campaigns’ exposure of environmental and social miscon-
duct by FI project ?nance clients. The perceived risk of
retail customer boycotts and the emergence of new forms
of shareholder activism caused some commercial bank
executives to believe they needed to respond to these criti-
cisms in a coordinated fashion.
Hence, in October 2002, ABN Amro and the
International Finance Corporation (IFC) convened a meet-
ing in London with Barclays, Citigroup and WestLB to begin
discussions on a common approach to perceived chal-
lenges to their risk management frameworks. There was
signi?cant concern that banks were ‘‘not doing enough
due diligence and truly understanding the risks’’ (Dutch
EPFI 1, Interviewee 1
12
) associated with their project
?nance deals. Each bank at the meeting had been the target
of extensive NGO campaigning, and all later acknowledged,
in various public domains (and within our research inter-
views), the signi?cant in?uence the NGO campaigns had
on their increased scrutiny of existing approaches to project
?nance.
The subsequent initiation of the Equator Principles was
thus based upon discussions between elite actors within
these four banks, in association with the IFC. They theo-
rized the adverse environmental and social impacts of pro-
ject ?nance as a problem of risk management that could be
resolved by adopting a set of agreed lending principles
based on risk management concerns. The underlying mar-
ket logic driving project ?nance risk management proce-
dures underpinned these legitimating accounts and
represented the beginning of an effort to reconstruct the
project ?nance rationale by assimilating the NGOs’ com-
munity-oriented environmental and social logic within
the prevailing market-oriented risk management logic
underpinning project ?nance (Greenwood, Suddaby, &
Hinings, 2002; Schneiberg & Lounsbury, 2008; Thornton
et al., 2012). The market logic was perceived as resonating
best with the values and interests of other project ?nance
?eld participants which could assist in mobilising collec-
tive action and resources for the development of the EP.
The global stature of the four leading institutions and their
central role within the project ?nance ?eld added credibil-
ity to their efforts and acted as resources that assisted
them in convincing six additional commercial banks to
support the EP launch. Among these additional six banks
there was a strong sense that this was a development that
was potentially ground breaking and required their
involvement:
[We thought] if the big boys are in there, the big global
banks [who are] the big market leaders in project
?nance, then obviously this is serious. . . This s going
to be big. . . [and that] . . . it was [potentially] ground
breaking work in terms of incorporating E, S and G
[environment, social and governance]. . . into the bank-
ing sector.
[Australian EPFI]
The initial group of four banks were keen to mobilize a
critical mass of leading project ?nance institutions to ?na-
lise and launch the EP in order to ensure the credibility of
the initiative, reduce the potential market risks associated
with it, and to position the EP as an industry standard
thereby coercing non-EP compliant banks into adopting
the Principles. The nature of the existing project ?nance
syndication market was seen as signi?cantly assisting with
this aim:
12
Please see Table 2 for details of the Equators Principles Financial
Institution (EPFI) interviewees.
N. O’Sullivan, B. O’Dwyer / Accounting, Organizations and Society 43 (2015) 33–55 41
We wanted critical mass. I mean I was Global Head of
Project Finance at the time, so you know, we were
concerned about the competitive element as well
[. . .] and we felt that if you could get the right banks
involved, because of the nature of the syndication
market for these deals, it would help to position
Equator as an industry standard [. . .] It would mean
that every deal that they [non-EP compliant banks]
did with an Equator bank leading it would be
Equator compliant. It would make it more dif?cult
for them [non EP compliant banks] to actually arrange
and structure a transaction unless they made it
Equator compliant.
[Dutch EPFI 1, Interviewee 2]
Moreover, many felt that a standardised framework for
assessing environmental and social risks in project ?nance
would greatly improve what they saw as the ad-hoc appli-
cation of existing World Bank environmental guidelines to
project ?nance deals, and would also assist in ‘‘levelling
[. . .] the playing ?eld’’ (UK EPFI 1, interviewee 1) with
respect to environmental and social issues in the project
?nance market. This would present a more coherent, col-
lective response to the concerns of campaigning NGOs
and replace the prevailing ‘‘case speci?c, ad-hoc defence
against NGO criticism’’ (Dutch EPFI 1, Interviewee 1).
Theorizing and crafting the Equator Principles: Advancing a
rationale for incremental change in project ?nance
The initial ten banks (we term these the ‘EP leaders’
13
)
agreed that the EP should be structured to apply only to pro-
ject ?nance activities. They rationalised this not only
because these activities were the main focus of NGO cam-
paigning, but also because the size and structured nature
of project ?nance deals made it easier for ?nancial institu-
tions (FIs) to identify the environmental and social risks
associated with particular projects. This allowed them to
adjust their credit risk assessment procedures and loan
documentation accordingly. In project ?nance, the use of
proceeds is known and the projects’ expected revenue
streams are regarded as remuneration for the loan. Hence,
any potential environmental and social risks that could
hamper the successful construction and operation of a pro-
ject, and thus potentially place the client in default of the
loan, ought to be taken into consideration at commence-
ment. In short, project ?nance was ‘‘the one product where
banks ha[d] the unique combination of exposure to risk
and ability to in?uence’’ (Dutch EPFI 1, Interviewee 1).
Project ?nance therefore made environmental and social
issues more ‘tangible’ and manageable than, for example,
standard commercial loans where the use of proceeds was
not always known and where FIs had less leverage to call
in a loan on environmental and social grounds alone.
Consistent with their vision of incremental change, in draft-
ing the Principles the banks drew on existing resources
within the mature project ?nance ?eld including: interna-
tional environmental and social policies and guidelines;
their own knowledge of environmental issues; and one of
the bank’s mining policies.
In general, the EP leaders were aware of the extensive
policy and procedural implications that the EP could have
within their own organizations and wanted to ensure that
the EP could be streamlined with their existing operations.
It was therefore essential that the Principles were framed
as being easily integrated within traditional decision-mak-
ing processes in the project ?nance banks:
When banks adopt or develop policy it literally becomes
law, and it’s codi?ed into the way in which that bank
does business. So, banks do not take lightly the develop-
ment of policy on anything. Trust me, [our] oil and gas
policy took a year and a half to develop and probably
about three months of approval through four different
committees [. . .] And in drafting the Equator
Principles, that was what all the banks were looking
at, they were saying this is going to go into my invest-
ment guidelines, this is going to go into my credit
guidelines, this is going to change the way in which I
look at projects. I need to ?nd ways in which this is built
into whatever structures.
[Dutch EPFI 1, Interviewee 1]
Furthermore, in order to encourage wider acceptance
within the project ?nance ?eld, a loosely speci?ed, discre-
tionary approach to the structure of the EP was adopted
especially regarding accountability requirements related
to external reporting on compliance with the Principles:
The reason [the EP] moved so quickly was because it
was a loose association, it was very informal and it
was voluntary. If we’d been looking at building
something that was a rigid [. . .] structure with formal
governance, legal obligations and some sort of accred-
itation [. . .] we’d still have been debating it I’m sure. It
[would] never have been launched. And also, more
banks would have been cautious about adopting it.
[UK EPFI 1, Interviewee 1]
This overarching risk management rationale, combined
with the EP leaders’ powerful political positions in the
mature project ?nance ?eld, assisted in diffusing the EP
following their launch on June 4th, 2003. The ‘early adop-
ters’ in our study – ?nancial institutions who adopted
the EP between June and October 2003 – perceived the
EP as a serious initiative that went beyond public relations
and competitive positioning due to the legitimacy they
attached to the ?nancial institutions initially involved.
Moreover, these early adopters highlighted the importance
of being part of an evolving movement towards EP-condi-
tioned loans in the project ?nance market and the practical
bene?ts of a standardised approach to managing environ-
mental and social risks throughout the ?eld.
13
Throughout the case narrative ‘EP leaders’ is the term we use to refer
collectively to the four commercial banks that initiated the development of
the EP and the six banks that later joined them to launch the EP on June 4th,
2003. These ten banks are distinguished from those banks that adopted the
EP after they were launched. This latter group are divided into: (1) EP ‘‘early
adopters’’ i.e. those banks that adopted the EP between June and October
2003; and (2) EP ‘‘late adopters’’ i.e. those banks that adopted the EP
between November 2005 and September 2007. The ‘EP leaders’, ‘early
adopters’, and ‘late adopters’ are collectively referred to as the ‘Equator
Principles Financial Institution (EPFI) movement’.
42 N. O’Sullivan, B. O’Dwyer / Accounting, Organizations and Society 43 (2015) 33–55
Rival movement consultation and contestation
By late 2003, early 2004, a small but growing ?eld
focused around the EP was emerging. This was initially
populated by the nascent Equator Principles Financial
Institution (EPFI) and NGO movements, and, to a lesser
extent, the International Finance Corporation (IFC).
Subsequently, heightened levels of interaction, mutual
awareness, and an increase in the information load sur-
rounding the EP materialised both between and among
these bodies. For example, given widespread claims that
the EP were starting to alter the face of the project ?nance
market, the EPFI movement started holding meetings to
share their initial experiences with EP implementation;
discuss the impact of the EP on risk management frame-
works; and outline IFC training on EP implementation.
These meetings sought to enhance the visibility of emerg-
ing organizational practices in order to assist EP diffusion
among non-EP adopting banks.
In January 2004, the campaigning NGOs organized
themselves into a more formal movement named
BankTrack. Their aim was to establish a more coherent net-
work capable of exerting greater in?uence on the activities
of the private ?nancial sector. BankTrack immediately
entered into a formal dialogue with the EPFI movement,
particularly around the lack of accountability mechanisms
embedded in the EP structure and across EP banks. Field
formation around the EP escalated over the following
two years as EP adopters increased and environmental
and social consultants and lawyers focused on the EP
emerged to advise the increasing number of EP adopters:
Once the Equator Principles were launched, then more
dialogue started, the institutions talked to each other,
we learned through each other. There was a huge
amount of sharing of information: ‘this is what we’re
doing, what are you doing?’ Meetings with the NGOs;
two-day meetings talking about reporting and trans-
parency [. . .] we’d obviously got BankTrack [there] with
all their own aspirations. And you know, we’d sit down
and we had good honest debates with the NGOs. So
yeah, the Equator Principles themselves evolved in that
initial period, that 12 to 18 month period after they
were launched.
[Australian EPFI]
The interaction between the EPFIs and BankTrack was
often confrontational, particularly as BankTrack continued
to contest the lack of EPFI accountability at ?eld and orga-
nizational levels in a series of highly publicised documents
(BankTrack, 2003, 2004a, 2004b, 2004c, 2005a, 2005b).
While the NGO movement openly acknowledged that the
development of the EP was the ‘‘?rst time there had
been. . . a substantive industry response to the sustainabil-
ity agenda. . . laid out by. . . NGOs’’ (Friends of the Earth
(FoE), US), they continually contested the discretionary
nature of EP adoption, implementation, and compliance.
For the NGOs, these perceived de?ciencies raised ser-
ious questions about the EPFIs’ substantive commitment
to their environmental and social responsibilities, particu-
larly as the Collevecchio Declaration had speci?ed the need
for banks to address all of their ?nancial operations and
not just project ?nance; which represented less than 5
per cent of commercial bank activities. Moreover, despite
the fact that some EPFI leaders were beginning to report
on EP implementation, the perceived slow pace and incon-
sistency of implementation, transparency and disclosure
across different EPFIs, as well as evidence of the continued
?nancing of questionable projects by certain EPFIs enraged
BankTrack. This was exacerbated by the continuing
absence of ?eld-level governance mechanisms to hold the
increasing number of EPFI adopters to account. While
BankTrack met with the EPFIs and relayed these concerns,
the EPFIs refused outright to establish the ‘multi-transpar-
ent accountability mechanisms’ that BankTrack requested:
After a year and a half we came to them and said ‘‘it’s
not working, we have some banks that have gone
beyond project ?nance or whatever. . .and we have
other banks that aren’t even internalising whatever pro-
cedures [are necessary] for implementation or keep
?nancing rubbish, so what the hell is going on?’’ So, if
you want to protect the bottom line, to be coherent,
you need to put up a sort of multi-transparent account-
ability mechanism. And they said ‘‘no, forget it’’ . . . And I
still see that this is the dividing argument between us
and them. I mean beyond whatever policies that you
adopt, the fundamental issue is. . .how you are being
held accountable in achieving this by those that are
affected by your operations?.
[Campagna per la Riforma della Banca Mondiale (CRBM)
interviewee]
Many EPFI interviewees claimed that the EPFIs’ tenta-
tive approach to accountability was in?uenced by the
mature commercial bank project ?nance ?eld’s entrench-
ment in a culture of secrecy, commercial con?dentiality,
and legal restrictions. Given these characteristics, these
interviewees claimed that the EP actually represented a
signi?cant departure for the banks involved given that
many of them had, at this time, developed no sustainability
mandates, established no separate sustainability divisions,
and had never produced sustainability reports. Moreover,
despite the absence of accountability criteria in the original
principles, several EP leader interviewees’ claimed that
there existed a ‘‘gentleman’s agreement’’ (Dutch EPFI 1,
Interviewee 1) within their collective to take EP imple-
mentation and compliance disclosures seriously. They
had agreed that due to the voluntary nature of the
Principles, each individual bank should be responsible for
its own EP implementation and disclosure and was to be
‘‘judged [on its] own individual performance’’ (UK EPFI 1,
Interviewee 1). There was a collective view that no bank
had the right to ‘‘tell another bank how to run their busi-
ness’’ (UK EPFI 1, Interviewee 1) and, as each bank was
structured differently, a ‘‘one size ?ts all’’ approach to
implementation and accountability was unworkable.
Nevertheless, the EPFIs were not entirely immune to the
NGOs’ concerns and gradually began to acknowledge some
of the emerging challenges associated with the diffusion
and governance of the EP. For example, throughout 2004
and 2005, a ‘?oating’ EP secretariat was established and
run by one EPFI via the ?edgling EP website. Annual meet-
ings with NGOs and small EPFI-NGO working groups on
N. O’Sullivan, B. O’Dwyer / Accounting, Organizations and Society 43 (2015) 33–55 43
issues such as disclosure were formed and a rotating EPFI
Chair position was established. Hence, a level of re?exivity
was evident amongst active EPFIs regarding the manner in
which the EP, the EP issue-based ?eld and the EPFI move-
ment were evolving. Nonetheless, despite persistent NGO
criticism, the EPFIs exercised their hierarchical position in
the issue-based ?eld and continued to reject the NGO
movements’ requests for more stringent accountability
and governance of the EP and EPFI movement. This resis-
tance to enhanced accountability dominated interactions
between EPFIs and NGOs, and directly in?uenced the
ongoing structuration of the issue-based ?eld throughout
2004 and 2005.
The persistence of competing accountability rationales
In February 2006, the International Finance Corporation
(IFC) revised its Safeguard Policies (upon which the EP were
based) and introduced environmental and social perfor-
mance standards. In response, the EPFIs organized a
three-month consultation process involving NGOs, project
?nance clients and some of?cial agencies aimed at drafting
a revised set of Principles. These consultations re?ected an
increasing level of interaction between participants in the
issue-based ?eld as well as a slowly emerging recognition
within BankTrack and the EPFI movement of the mutual
bene?ts of more constructive dialogue. Following the con-
sultation process, on July 6th, 2006, the Equator Principles
II (EP II) were launched. One of the key new criteria
involved the establishment of a reporting Principle,
‘‘Principle 10’’ requesting each adopting EPFI to commit
‘‘to report publicly at least annually about its Equator
Principles implementation processes and experience, tak-
ing into account appropriate con?dentiality considera-
tions’’ (EP II, 2006, p.5, emphasis added). This was
accompanied by a footnote, which stipulated that:
Such reporting should at a minimum include the num-
ber of transactions screened by each EPFI, including the
categorization accorded to transactions (and may
include a breakdown by sector or region), and informa-
tion regarding implementation.
[Equator Principles II (EP II), 2006, p.5]
Even though the NGOs generally welcomed improve-
ments to the structure of EP II, BankTrack found Principle
10 vague in its requirements, and complained that no prac-
tical guidance was provided on how it should be imple-
mented. This was deemed a ‘‘lowest common
denominator’’ approach to EPFI social accountability and
an insuf?cient response to the extensive transparency
and disclosure recommendations that BankTrack had
repeatedly framed in detailed texts (see e.g., BankTrack,
2006a, 2006b). The BankTrack coordinator interviewed
claimed that, had it not been for the NGO recommenda-
tions the reporting footnote would never have existed.
The EPFIs, however, again in?uenced by the professional
boundaries of the mature project ?nance ?eld, asserted
that the inclusion of the reporting principle was another
important, incremental step in the progression of the EP.
A minimum standard for reporting was perceived as the
most practical option given the persistence of disclosure-
related challenges surrounding commercial con?dentiality
– particularly regarding the disclosure of internal risk man-
agement procedures to competing banks.
The intensi?cation of issue-based ?eld structuration –
In?uencing the mature project ?nance ?eld
During the revision process, the three ‘late adopter’
interviewees – representing banks that adopted the
EP between November 2005 and September 2007 –
actively considered the signi?cance of the revised EP
implementation and reporting requirements for their orga-
nizations. The evolving issue-based ?eld began to signi?-
cantly in?uence the mature commercial bank project
?nance ?eld when by late 2005 EPFIs were widely quoted
as arranging over 70% of project ?nance deals. These mar-
ket trends meant it was becoming increasingly dif?cult for
any bank to enter into project ?nance syndication without
being an EP adopter:
Basically, the idea in the end was that we had all the
structures, all the tools to be in line with the Equator
Principles, so why not adopt them? And on the other
hand there were some, of course, broader connections
[between] the top management and IFC, and with other
banks, [who were] saying ‘you should join now because
it could be very good for you and the Equator
Principles’, because [Name of interviewee organization]
is such a big institution for project ?nance [. . .] I think
what was also an incentive to join was that when we
asked the business line what they thought about it they
said ‘well, we already asked to [adopt it] actually
because the market is asking for it’. Nowadays, when
you are either an advisor or the arranger for project
?nance you have to think about the Principles if you
want to syndicate the loan.
[French EPFI, Interviewee 1]
The arrival of these late adopters signi?ed the Equator
Principles’ growing stature as the recognised standard or
norm for socially accountable project ?nance. They both
experienced and contributed to the emerging movement
towards EP adoption in the project ?nance ?eld as well
as having the advantage of being able to learn from and
benchmark themselves against the perceived ‘‘best prac-
tice’’ of existing EPFIs. Interviewees noted how the issue-
based ?eld – particularly the support of the EPFI move-
ment and the growing body of EP consultants – was, at this
stage, facilitating even greater information exchange and
capacity building around EP implementation. One intervie-
wee highlighted the extensive ‘‘body of knowledge and
body of practice’’ that he could draw on, which, he claimed,
was aided by the ‘‘collegial relationship between the vari-
ous Equator [EP] banks’’ thereby allowing him to ‘‘call on
others in other banks to get advice’’ when needed
(Dutch/Belgian EPFI, Interviewee 2).
The support for EP implementation within ?nancial
institutions increased further when, following an EPFI
meeting in Washington in May 2007, a brief guidance
document for reporting on EP implementation was pro-
duced. This proposed minimum requirements for report-
ing, suggestions on the extent of information disclosures,
44 N. O’Sullivan, B. O’Dwyer / Accounting, Organizations and Society 43 (2015) 33–55
and formats for data presentation. In addition, working
groups focused on discussing EP loan documentation pro-
cesses, governance issues, and NGO engagement were
either newly formed or became more formalised thereby
further increasing the level of collective EPFI action on EP
diffusion.
Evolving issue-based ?eld contestation and structuration
Despite some EP adopters’ individual efforts to imple-
ment the EP over the 2004–2007 period, active EPFIs con-
cluded that certain EPFIs [termed ‘free riders’ by
BankTrack] were ‘‘exploit[ing] the Equator Principles as
some sort of environmental PR [public relations] mecha-
nism’’ (UK EPFI 1, Interviewee 1). These included EPFIs
who claimed to have adopted the EP but had no project
?nance operations, were not involved in various EP issue-
based ?eld activities, and/or continued to ?nance highly
questionable transactions. Hence, as the total number of
EPFIs had risen to forty by 2007, the small number of
10–15 active EPFIs considered reconstituting the EP
requirements in order to better manage the relationship
between the EPFI movement ‘‘vanguard and tail’’ (UK
EPFI 1, Interviewee 1). A working group on EPFI govern-
ance at ?eld and organizational level was developed where
EPFIs decided that external reporting on EP compliance
should become the required EP membership condition.
These requirements were developed against the back-
ground of a BankTrack public assessment of EPFI reporting
which showed that of the EPFIs that had adopted the EP
before 2007 ‘‘40 per cent did not meet the[se] minimum
[reporting] requirements, [while] 19 per cent met them,
and 40 per cent exceeded them’’ (BankTrack, 2007a, p.1).
Hence, while the NGOs welcomed the EPFI movement’s
efforts to ?nally address some aspects of EP accountability
and governance, they were again dismissive of the new
reporting proposal, insisting that it represented ‘‘a very
minimal change’’ (BankTrack Coordinator). It was per-
ceived as a wholly inadequate way of addressing the EP
‘free-rider’ problem, especially as the reporting require-
ments were not stringent and, according to the
BankTrack Coordinator, ‘‘just basically put in writing what
ABN Amro and a few other banks [we]re doing already’’. In
general, the NGOs wanted much more information dis-
closed on banks’ clients, individual projects, and so-called
‘‘rosy deals’’ i.e. deals where the EP had been effectively
applied (to match the list of EPFI ‘‘dodgy deals’’ posted
on the BankTrack website).
The EPFIs, however, insisted, that, in the absence of
more formal accountability mechanisms ‘‘the [ultimate]
sanction [was] the bank’s reputation’’ (US EPFI).
Moreover, they diverted their attention towards develop-
ing a new EP management structure which came into
operation in early 2008 and marked a signi?cant departure
in the governance of the EP. This structure established a
steering committee comprising many of the original
‘‘group of ten’’ EPFIs and a set of seven working groups.
An EPFI Chair was formed to oversee the steering commit-
tee, working groups and engagement with the IFC, and a
more formal secretariat function was established to deal
with EP administration. These developments further
enhanced the sophistication of the emerging issue-based
?eld infrastructure.
A progression in EPFI social accountability: The EP ‘institution’
in 2008
By the ?fth anniversary of the EP in June 2008, there
were sixty adopting EPFIs and the Principles were widely
recognised as the ‘‘gold standard for sustainable project
?nance. . . [that had] . . . transformed the funding of major
projects globally’’ (EP Press Release, 2008a). For example,
it was estimated that in 2007, 71 per cent of the total debt
tracked in emerging markets was subject to the EP (EP
Press Release, 2008a). The EP had evolved into the project
?nance ‘‘institution’’, in?uencing the lending practices of
active EPFIs in the mature commercial bank project ?nance
?eld. The Principles were embedded into: the due diligence
carried out on a project (involving Principles 1, 2 and 3);
credit risk approval processes (Principles 4, 5 and 6); the
initial term sheet and loan documentation (Principle 8);
and the loan documentation over the life of a loan
(Principles 5 to 9 inclusive). They also increased the
EPFIs’ need to demonstrate some level of social account-
ability (Principle 10). For example, one EPFI interviewee
claimed that:
They [EP] are making differences in which decisions
[are made] [. . .] [Name of interviewee organization]
turn down transactions for non-Equator compliance. I
know other banks that have done the same thing. The
Equator Principles allow banks to get into discussions
with clients to try and change things.
[Dutch EPFI 1, Interviewee 1]
Several EPFI interviewees indicated that the EP had cre-
ated a much needed standardised framework for environ-
mental and social risk management for project ?nanciers;
where the EP had created a ‘‘community’’ of broad stake-
holders, and facilitated the common recognition and com-
munication of environmental and social issues within
project ?nance practice. This highlighted the increasingly
structured nature of the issue-based ?eld:
[There are] bene?ts to the bank and bene?ts to the cli-
ent, and Equator is now just part of the terminology, it
is part of the lexicon surrounding project ?nance. The
biggest success to me is not about the 54 banks that
have adopted it, it’s actually the fact that lawyers talk
about the Equator Principles and environmental consul-
tants talk about the Equator Principles, and the banks.
And now it’s [. . .] created a community and it’s made
it more ef?cient in terms of communication. As soon
as you say ‘Equator’ you should know what environ-
mental management standards we’re talking about.
[UK EPFI 1, Interviewee 1]
A maturing of the relationship between the NGO and
EPFI movements also emerged throughout the ?eld.
While their relationship had long been strained given their
competing rationales for socially accountable project
?nance, their mutual tolerance, respect and understanding
of each other had improved by 2008. Interviewees from
both NGOs and the EPFIs indicated that while signi?cant,
N. O’Sullivan, B. O’Dwyer / Accounting, Organizations and Society 43 (2015) 33–55 45
and often irresolvable, differences remained and con-
testation continued, they now recognised more opportuni-
ties for cooperation around the EP and broader
environmental and social policies and activities:
I think most of them [active EPFI representatives] want
the Equator Principles to be properly applied. But the
dilemmas of the individual project of?cer, who’s strug-
gling with [EP] requirements on the one hand, and the
need to sign the deal on the other, is a dif?culty [. . .]
[So] it was very much the effort of the banks to make
us more aware of their everyday problems, and I always
like to hear that, as it re?nes your thinking.
[BankTrack]
With respect to EPFIs’ environmental and social report-
ing, despite the NGOs’ continuing concerns, the level and
quality of EPFI transparency and disclosure regarding EP
implementation increased signi?cantly between 2003
and 2008. By 2008, the majority of EPFIs were meeting
the basic EP reporting requirements of Principle 10 – the
EPFI ‘‘membership’’ condition. Many EPFIs, and certainly
those interviewed for this research, went well beyond the
basic minimum reporting requirements to include varying
levels of information on key aspects of their EP imple-
mentation procedures. They also published case studies
on ‘‘dilemmas’’ regarding challenging or high pro?le pro-
jects and the stakeholder engagements associated with
these. EP leader organizations were at the forefront of this
EP-related disclosure thereby re?ecting a trend towards
greater, albeit selective, exposure of internal environmen-
tal and social policies and risk management approaches.
Discussion
The case narrative reveals how the NGO and Equator
Principles Financial Institution (EPFI) movements shaped
Equator Principles issue-based ?eld structuration through
their (re)construction of competing rationales and
mobilization of collective action and political and cultural
resources around their opposing notions of socially
accountable project ?nance. This structuration process
was predominantly controlled by the incumbent EPFI
movement and was iteratively and recursively linked to
the existing infrastructure (cultural, relational and opera-
tional systems) of the mature project ?nance ?eld.
The analysis unveils how, initially, individual and later
collective NGO campaigns drew public attention to the
adverse environmental and social implications of ?nance
sector lending activities. Throughout these campaigns
NGOs constructed a shared meaning system around ‘so-
cially accountable ?nance’, the rationale for which was
underpinned by a community-oriented environmental
and social logic. The NGOs’ collective approach strength-
ened their salience and their potential in?uence on the
?nance sector (King, 2008). In particular, it created uncer-
tainty in the parts of the commercial bank community
engaged in project ?nance causing key individuals in orga-
nizations that had been targeted by NGO campaigning to
question the adequacy of their existing risk management
frameworks. These incumbents theorized the need for
change and sought to reconstruct the existing rationale
for project ?nance by assimilating the NGOs’ community-
oriented environmental and social logic within the prevail-
ing market-oriented risk management logic underpinning
project ?nance (Thornton et al., 2012). To do so, they
enrolled their existing knowledge and experience with
environmental risk management to produce a draft set of
environmental and social principles for project ?nance,
and used their central, elite positions in the project ?nance
?eld to mobilize the additional political support necessary
to create the Equator Principles.
While the external NGO movement in?uenced the
initiation of the Equator Principles Financial Institution
(EPFI) movement within the project ?nance ?eld (see also,
Davis et al., 2008; Fligstein, 1996), it was ultimately unable
to mobilize suf?cient resources to ensure that its vision of
‘just ?nance’ prevailed. In particular, the absence of strin-
gent EP accountability mechanisms undermined its vision
of socially accountable ?nance. The EPFIs, given their
embeddedness in the mature project ?nance ?eld, saw
their priority as developing a set of ‘aspirational’ environ-
mental and social risk management guidelines which
would not threaten, and could even enhance, their com-
petitive advantage. These opposing NGO and EPFI move-
ment visions of what the EP could and should be led to
on-going interpretive struggles around the notion of
socially accountable project ?nance and proved central to
initiating the structuration of the EP issue-based ?eld.
The EP leaders’ theorisation of the EP into understand-
able and compelling formats through, for example, their
justi?cation of new EP norms and practices on pragmatic
economic grounds acted as an important EP diffusion
mechanism among early adopters (Zilber, 2006). The
Equator Principles Financial Institution (EPFI) movement
gradually emerged as a political–cultural force for EP diffu-
sion. It drew on the existing meaning systems and profes-
sional networks and channels of the extant project ?nance
?eld. For example, it embedded discussions of the EP into
the overarching risk management rationale of the mature
project ?nance ?eld and ensured that the EP could be
seamlessly embedded within existing credit risk analysis
processes.
Persistent contestation between the NGO and EPFI
movements regarding the interpretation of socially
accountable project ?nance was, however, a key character-
istic of the ?eld structuration process. Banktrack’s social
accountability demands were unrelenting and eventually
led to the EPFIs considering the necessity of EP external
reporting, and of engaging more directly with BankTrack.
BankTrack was, however, not powerful enough to persuade
the Equator Principles Financial Institutions (EPFIs) to
embrace highly stringent ?eld-level accountability mecha-
nisms in the revised EP (EP II). However, as this NGO-EPFI
contestation continued, the diffusion of the EP and the
simultaneous structuration of the EP issue-based ?eld con-
tinued apace. The normative movement toward EP adop-
tion in the project ?nance market became a key catalyst
for EP adoption by late adopters, in particular the nature
of the project ?nance syndication market in which ordinar-
ily competing banks cooperated. Given the nature of this
market, if ?nancial institutions failed to adopt the EP, the
46 N. O’Sullivan, B. O’Dwyer / Accounting, Organizations and Society 43 (2015) 33–55
issue-based ?eld formation would have continued to crys-
tallise without them thereby excluding them from project
?nance deals. Moreover, late adopters were able to utilise
the increasingly structured EPFI movements’ information
exchange and capacity-building channels at the issue-
based ?eld level to assist their EP implementation efforts.
Growth in EP adopters did, however, bring its own
problems, particularly in a context where efforts were
being made to get competitors to align around an agreed
interpretation of EP implementation. For the EP leaders,
the initial mobilization of the collective around the EP
was accompanied by the challenge of maintaining, co-
ordinating and governing this collective (see also, Dorado,
2005). Consequently, EPFI leaders developed, inter alia, an
EP governance working group and agreed that EPFI report-
ing would become the EP membership requirement from
2007 onwards, in particular to address a persistent EP
‘free-rider’ problem. By 2008, the EP issue-based ?eld
infrastructure had become increasingly sophisticated and
the EP were considered as the standard (institution) for
socially accountable project ?nance.
While BankTrack remained highly critical of the EPFI
movement’s market-oriented rationale and their limited
action regarding EPFI accountability, the mutual awareness
and respect between the EPFI and NGO movements
matured as the EP issue-based ?eld evolved. However, this
occurred in a context where normative contestation over
the nature of socially accountable project ?nance
persisted.
Theorizing issue-based ?eld structuration
The case analysis extends our understanding of
Hoffman’s (1999) conceptualisation of how issues, in par-
ticular sustainability-related issues, affect mature ?elds.
Drawing on this analysis, we now propose a model which
theorizes how issue-based ?elds evolve an institutional
infrastructure (see Fig. 1). Central to our model is that
issue-based ?elds evolve an institutional infrastructure –
common meaning, relational and operational systems –
based primarily upon the infrastructure of the existing
mature ?eld which they straddle. In our case, common
meaning systems comprise, inter alia: the rationale/logics
underpinning the EP; EPFI knowledge exchange about EP
experiences amongst EPFIs; and rationale/logics and
sense-making about EP revisions amid EPFIs. The common
relational systems include: the EPFI informal and formal
network amongst EPFIs; EPFI (group and individual) formal
and informal networks with clients; NGOs (the Banktrack
collective and the individual NGOs within it); and EP ‘pro-
fessionals’ such as lawyers and consultants. The common
operational systems encompass, inter alia: EPFI steering
committee work; EPFI (group) produced loan docu-
mentation and implementation guidance documents for
the EP; EPFI training programmes within individual
EPFIs; the integration of the EP into individual EPFI project
?nance processes; and individual EPFI reporting on EP
implementation.
Issue-based ?eld structuration processes are seen to be
heavily in?uenced and controlled by elite incumbents
occupying key positions within the existing mature ?eld
where the issue arises, or which it in?uences. When
mature ?eld disruption or uncertainty arises because of a
new issue of concern arising from outside the mature ?eld
– in our case, the issue of socially accountable ?nance
advocated by an external NGO movement – these central
actors use their powerful ?eld positions to address the
issue by instigating change that meets the conditions of
the mature ?eld. To achieve this, we propose that these
actors work most effectively as a collective (in our case,
as an internal movement) by engaging in the (re)construc-
tion of mature ?eld rationales and logics – for example, the
assimilation of a community-oriented environmental and
social logic into the market logic of the mature project
?nance ?eld – and the mobilisation of resources and col-
lective action surrounding the issue.
This issue-based ?eld structuration evolves in three key
phases. First, in order to theorize the issue, or ‘‘problem’’,
and to propose a legitimate course of action to address it,
the central actors in the mature ?eld enlist the prevailing
rationale and logic of the mature ?eld affected by the issue.
They then reconstruct this rationale by assimilating the
alternative ‘issue-logic’ advocated by external issue-actors,
such as NGO movements, into the prevailing logic of the
mature ?eld (Thornton et al., 2012). This facilitates the
establishment of new issue-related institutions (in our
case, the Equator Principles) aimed at driving some form
of institutional change and represents the ?rst stage of
the issue-based ?eld structuration process. This process
is distinct from institutional change common in mature
?elds, where the existing ?eld rationale(s) and logic(s)
often need to be replaced as opposed to reconstructed in
order to provoke substantive ?eld-level change (see,
Greenwood & Suddaby, 2006; Kitchener, 2002;
Lounsbury, 2002; Scott, Ruef, Mendel, & Caronna, 2000;
Suddaby & Greenwood, 2005).
Second, this reconstruction of rationale(s) and logic(s)
assists central actors in mobilising collective resources
and action through existing mature ?eld networks and
channels in order to diffuse new issue-related institutions
and practices amongst potential issue-based ?eld con-
stituents; thus making these actors the political–cultural
force for (issue) diffusion (Schneiberg & Lounsbury,
2008). These issue-related institutions and practices
simultaneously serve to initially appease those issue-re-
lated actors external to the mature ?eld promoting an
alternative rationale (Hardy & Maguire, 2008; Wooten &
Hoffman, 2008) as these actors perceive these institutions
and practices as indicative of an initial willingness to
address their key concerns. This represents the second
stage of the issue-based ?eld structuration process and
whilst it is somewhat similar to the ‘‘institutional
bricolage’’
14
that Maguire et al. (2004) argue occurs in the
structuration of emerging ?elds, we propose that issue-
based ?elds do not suffer to the same extent from the ‘‘liabil-
ity of newness’’ (Maguire et al., 2004) inherent in emerging
?elds. This is because, in our case, the EP issue-based ?eld is
predominantly based upon the deeply engrained cultural,
14
Bricolage represents ‘‘the creation of new practices and institutions
from different elements of existing institutions’’ (Levi-Strauss, 1966, cited
in Thornton & Ocasio, 2008, p.117).
N. O’Sullivan, B. O’Dwyer / Accounting, Organizations and Society 43 (2015) 33–55 47
Issue-Based Field:
Guiding institution: Issue-based
Infrastructure: Issue-related meaning, relational & operational systems
Occupants: Diverse issue-related actors
Core impact on: Mature field logics & practices
Less powerful
issue-related
actor rationales/
logics & action
Mature field central actors’:
reconstruction of established rationales/logics;
mobilization of collective action &
resources around the issue
Mature Field:
Established institution(s) & practices
Infrastructure: Established meaning, relational & operational systems
Occupants: Established members
(1)
(4)
(5)
(5)
(6) &(7)
(8)
(2) & (3)
Fig. 1. An issue-based ?eld structuration process.
Key to Fig. 1:
Arrows:
The complete arrow lines signify on-going direct and powerful in?uence.
The dotted arrow lines signify ?uctuating levels of direct and/or less powerful in?uence over time.
The direction of an arrow indicates the direction in which in?uence ?ows.
Numbers:
1. New ‘issue of concern’ arising from external movement outside the mature ?eld (‘less powerful issue-related actors’) and impacting on the mature ?eld.
2. ‘Mature ?eld central actors’ assimilate the ‘issue-logic’ underpinning the ‘issue of concern’ into the established rationales/logic(s) of the mature ?eld.
3. Mature ?eld central actors mobilize collective resources and action around the ‘issue of concern’ using the existing mature ?eld networks and channels.
This occurs simultaneously with 2. above.
4. Continual interpretive struggles occur around the ‘issue of concern’ between the mature ?eld central actors and less-powerful issue-related actors.
5. The combination of 2, 3, and 4 above initiates the issue-based ?eld structuration process which is underpinned by the establishment of a new issue-related
institution by mature ?eld central actors and an evolution in supporting practices. The emerging issue-based ?eld is initially subordinate to the mature ?eld.
6. Intensi?cation of formal and informal interactions between disparate powerful and less-powerful issue-related actors around the ‘issue of concern’. Competing
logics/rationales and the level of change the new issue-based institution is instigating are key sources of tension arising within the evolving issue-based ?eld.
7. Increased formalisation of the issue-based ?eld institutional infrastructure as the issue-related institution is diffused throughout the issue-based ?eld. Mature
?eld central actors largely control the progression of the issue-based institution and practices through, inter alia, formalised issue-coalitions or associations. Less
powerful issue-related actors exert some in?uence over these associations and practices, albeit on a ?uctuating basis.
8. The issue-based ?eld becomes less subordinate to the mature ?eld and iteratively in?uences mature ?eld logics and practices in an ongoing manner. However,
despite escalating mutual awareness and respect between mature ?eld central actors and less-powerful issue-related actors, enduring differences surrounding
the rationales/logics underpinning the issue, the issue-related institution, and the underlying practices may prevent more substantive change occurring in the
mature ?eld.
48 N. O’Sullivan, B. O’Dwyer / Accounting, Organizations and Society 43 (2015) 33–55
relational and operational systems and boundaries of the
underlying mature ?eld to which the issue relates. This implies
that the use of existing mature ?eld meaning systems,
networks and channels makes the legitimacy, diffusion
and enactment of new issue-based ?eld institutions and
practices easier than it would be in an emerging ?eld
where it is necessary to newly establish ‘‘clearly de?ned
leading actors, [. . .] a coherent discourse, structures of
cooperation and domination, sets of accepted norms, [and]
stable interorganizational relationships’’ (Maguire et al.,
2004, p.675).
Third, issue-based ?eld structuration crystallises
through the growth in diverse ?eld occupants and the
intensi?cation of their interactions. Issue-based ?eld mem-
bership is determined by actors’ subjective and wide-rang-
ing relationship with the issue and it is this identi?cation
with the issue that brings disparate powerful and less-
powerful actors into closer proximity than is likely in
mature or emerging ?eld structuration processes.
Interactions between some of these diverse ?eld members
(such as the NGO and EPFI movements), through formal or
less formal meetings, discussions and exchanges, are, at
least initially, contentious. This is due to their often com-
peting rationales regarding the issue, the nature and trajec-
tory of the new issue-related institution (in our case, the
Equator Principles), and the level of perceived change the
new issue-related institution is instigating in the underly-
ing mature-?eld logics and practice. While disparate actors
occupy the issue-based ?eld and interact more than they
would in mature ?eld settings, the hierarchical relation-
ships and power struggles existing between them (for
example, between the EPFI and NGO movements) as they
interact around the mature ?eld are mainly transferred to
the issue-based ?eld where powerful, central mature ?eld
actors largely control the progression of the issue-based
institution and practices through formalised issue-coali-
tions or associations (such as the EP Association). Such for-
malised forums become more sophisticated with an
increase in members from the mature ?eld as the new
issue-related institution (the Equator Principles) continues
to be diffused amongst them and they establish coordi-
nated work programmes, management and governance
systems. Less powerful actors external to the mature ?eld
to which the issue relates (such as NGO movements) can
in?uence these forums through, for example, their advo-
cacy for certain content or structural developments to
the emergent issue-institution. However, our case suggests
that this in?uence ?uctuates over time and can often be
limited due to resource constraints. Ultimately, continuous
interaction and openness can lead to mutual awareness
and respect developing between competing powerful and
less powerful issue-based ?eld actors as they learn about
each other’s activities and challenges. This creates the
potential for more collaborative as opposed to combative
interactions. Nevertheless, on-going disparity and tension
between their respective rationales surrounding the issue
(socially accountable project ?nance), the issue-related
institution (the Equator Principles), and the practices
adopted prevents this mutual awareness and respect from
instigating more substantive change within the mature
?eld (the project ?nance ?eld).
Van Wijk et al. (2013) assert that the ambiguity of an
issue, especially new sustainability-related issues, may
contribute to the likelihood of more collaborative work
between mature ?eld incumbents and less powerful com-
peting external movements in ?eld structuration pro-
cesses. However, our analysis suggests that the newness
or ambiguity of an issue (such as socially accountable pro-
ject ?nance) may actually facilitate a certain level of cap-
ture of the issue by powerful mature ?eld incumbents
who possess the necessary resources to develop issue-
based institutions and practices which predominantly suit
the rationale and logics of the mature ?eld to which the
issue relates. This can accentuate the combative nature of
external and internal movement interactions in issue-
based ?eld structuration processes. Whether primarily
combative or collaborative, we contend that such ongoing
moves and counter-moves between less-powerful and
powerful issue-related actors continuously shape issue-
based ?eld structuration and the institution(s) it supports.
Our case analysis indicates that issue-based ?eld struc-
turation is recursively linked with the underlying mature
?eld, with existing cultural, relational and operational
‘pre-conditions’ not just in?uencing the initial stages of
issue-based ?eld structuration – as may be the case with
emerging ?elds (Maguire et al., 2004) – but on a continual
basis. In turn, we view the issue-related institution (the
Equator Principles), and the meaning, relational and opera-
tional systems supporting it at issue-based ?eld level as
iteratively in?uencing, to varying degrees, mature ?eld
logics and practices (in our case, those associated with pro-
ject ?nance) on an ongoing basis. Furthermore, we con-
sider the issue-based ?eld as being ‘‘vertically’’ related, or
subordinate, to the more authoritative mature ?eld (see,
Fligstein & McAdam, 2011), certainly in the initial stages
of issue-based ?eld structuration. However, we propose
that both ?elds develop a more ‘‘horizontal’’ (Fligstein &
McAdam, 2011), or mutually dependent, relationship over
time as the issue (socially accountable project ?nance) –
and its related institution (the EP) – become more fully
accepted and assimilated into mature ?eld logics and
practices.
This model of issue-based ?eld structuration could be
adapted to other studies that seek a nuanced, contextual
understanding of how sustainability-related issues, such
as sustainable/socially accountable agriculture, forestry,
?shery, mining, and tourism, affect and are affected by
the mature ?elds to which they relate. It could also be
mobilized to examine how separate ?elds can develop
around sustainability-related issues, bringing disparate
issue-related actors together in cultural, relational and
operational contexts that develop issue-related institu-
tions (e.g. standards, codes of conduct) that directly in?u-
ence how the issue is interpreted and acted upon in the
mature ?eld, while at the same time being iteratively and
recursively in?uenced by the infrastructure of the mature
?eld over time. This accentuates the potential of ?eld-level
research to investigate ?elds as ‘‘sites where problems of
organizing are debated among disparate actors [and is]
integral to understanding how organizations construct
solutions to the problems of the twenty-?rst century’’
(Wooten & Hoffman, 2008, p.143).
N. O’Sullivan, B. O’Dwyer / Accounting, Organizations and Society 43 (2015) 33–55 49
Conclusions
This paper has studied why and how commercial banks
began to integrate sustainability issues into their project
?nance operations and the impact this had on the mature
commercial bank project ?nance ?eld and on commercial
bank social accountability. It speci?cally examined the role
of a non-governmental organization (NGO) movement
external to the project ?nance ?eld and an incumbent
commercial bank movement within this ?eld in the devel-
opment of the Equator Principles (EP) and the structura-
tion of the EP issue-based ?eld (Hoffman, 1999). In
particular, we evidenced how the con?icting, collective
rationales and actions of both the NGO and commercial
bank movements surrounding the issue of socially
accountable project ?nance acted as the basis of EP
issue-based ?eld structuration, and how this contentious,
political process enhanced, rather than constrained, adopt-
ing Equator Principles Financial Institutions’ (EPFIs’) social
accountability.
The study makes a number of contributions to the
literature. First, it presents a unique account of the struc-
turation of an issue-based ?eld. Our focus advances
Hoffman’s (1999) conceptualisation of issue-based ?elds,
as we evidence and theorize how and why these ?elds
evolve an institutional infrastructure. We proposed a
model of issue-based ?eld structuration which can be
mobilized to inform future research into how sustainabil-
ity issues impact on, and are impacted by, diverse mature
?elds. Second, we develop prior work examining the
institutionalization processes surrounding the develop-
ment of corporate social reporting and accountability. We
unveil how environmental and social risk assessment
became a key part of credit risk analysis in project ?nance,
and how this risk assessment process came to be exter-
nally reported on as part of a collective (and individual)
commercial bank effort to encourage environmental and
social due diligence and socially responsible decision mak-
ing in project ?nance. Speci?cally, we illustrate how the EP
issue-based ?eld structuration process originated and pro-
gressed the production of accounts of banks’ efforts to
categorise, quantify, monitor and avoid (where possible)
environmental and social risks. This develops our compre-
hension of the in?uence of ?eld-level institutionalization
processes on the evolution of corporate social and environ-
mental reporting practices. We extend Archel et al.’s
(2011) insights into the role of activist stakeholders in
the structuration of ?elds focused on corporate social and
environmental responsibility and reporting. Archel et al.
(2011) contend that activist groups who engage in institu-
tional processes aimed at improving corporate account-
ability are likely to be conditioned by these processes,
thereby gaining only second-order concessions. While we
found evidence of second-order concessions from the
EPFI movement, we also discovered a continual progres-
sion in these concessions as NGO movement engagement
deepened throughout the issue-based ?eld formation pro-
cess. This highlights the importance of unpacking the nat-
ure of second-order concessions in order to reveal the
extent of change, and of not automatically dismissing
apparently non-radical concessions as insigni?cant.
Overall, while elements of our analysis concur with
Archel et al.’s (2011) and Cooper and Owen’s (2007) con-
cerns about the limited potential for civil society actors
such as NGOs to shift corporate social responsibility (and
reporting) in a more challenging direction, we considerably
nuance their conclusions by unveiling how the NGO move-
ment in?uenced a progression in the attention afforded to
these issues in a highly conservative industry sector.
Third, we advance the literature on the impact of exter-
nal and internal movements on institutional change and
?eld structuration (e.g. Fligstein, 1996) by studying the
role of NGO and Equator Principles ?nancial institution
(EPFI) movements in the Equator Principles issue-based
?eld structuration process. In particular, we unveil how
the nature of the issue fuelling movement activity in?u-
ences these processes. In contrast to Van Wijk et al.’s
(2013) contention that the ambiguity of an issue may con-
tribute to more collaborative work between mature ?eld
incumbents and less powerful external movements in ?eld
structuration, we propose that the newness or ambiguity
of an issue (such as socially accountable project ?nance)
may actually facilitate a certain level of, albeit far from
complete, capture of the issue by powerful ?eld incum-
bents who possess the resources necessary to develop
issue-based institutions and practices designed to pre-
dominantly suit their preferred rationale and logics.
A number of limitations along with related opportuni-
ties for future research arise from this study. First, we pre-
dominantly unveil the contentious nature of (social)
movement interactions in issue-based ?eld structuration,
but there could also be more explicitly collaborative efforts
involved (see, Van Wijk et al., 2013). While we unveil
some, albeit limited, evidence of collaboration in the later
stages of our case, future research could explore how
intense collaborations between external and internal
movements can shape issue-based ?eld structuration in
order to advance our theorizations of how collaborative
relationships may shape issue-based ?elds. Of particular
interest would be the collaborative conditions under which
alternative logics come to dominate, are assimilated, or are
ignored (Thornton et al., 2012) as the institutional infras-
tructure of an issue-based ?eld is constructed. Work of this
nature could also explore how, and the extent to which,
external movements who collaborate extensively with
internal movements become embedded in the evolving
issue-based ?eld institutional infrastructure as it evolves
and matures. Within these extensive collaborations the
extent to which ‘issues of concern’ come to impact upon
the logics and practices pervading the mature ?eld to
which the issues relate could be compared with our ?nd-
ings. This would extend and develop our theorization of
issue-based ?eld structuration to more explicitly collab-
orative efforts between external and internal movements.
Such a focus would also respond to Lee and Lounsbury’s
(2015) recent call for an enhanced understanding of how
movements usher new logics into ?elds and ‘‘provide an
infrastructure as well as a legacy of beliefs and practices
that enable logics to endure’’ (p. 17).
The issue-based ?eld we study speci?cally focuses on
project ?nance activities in the mature commercial bank
?eld, but there are other commercial bank activities that
50 N. O’Sullivan, B. O’Dwyer / Accounting, Organizations and Society 43 (2015) 33–55
could also be addressed beyond project ?nance. For exam-
ple, it is possible that the creation of the EP issue-based
?eld and the infrastructure underpinning it could facilitate
broader consideration and reporting of other major
environmental and social issues by commercial banks in
their lending activities beyond project ?nance. In effect,
the EP issue-based ?eld could act as a catalyst, facilitating
the creation of other, parallel, issue-based ?elds around
further key social and environmental issues impacting
the commercial banking sector. For example, the issues
of human rights and climate change have both become
important topics that frequently dominate project
?nance/EP as well as broader commercial lending due dili-
gence processes. This has resulted in efforts to better
acknowledge and clarify the EPs’ role with respect to both
of these issues in the recently released third version of the
EP – EP III – along with the emergence of individual human
rights and climate change policies for broader commercial
lending activities. Future research could explore the role of
the EP issue-based ?eld, in ‘facilitating’ the development of
a human rights issue-based ?eld, or a climate change
issue-based ?eld, existing alongside the existing EP issue-
based ?eld. It would be intriguing to uncover the process
through which the structuration of these potential parallel
?elds draw on the existing EP issue-based ?eld, and how
they evolve and relate to the existing mature project
?nance ?eld and broader mature commercial bank ?eld.
Given that we have focused on examining ?eld-level
processes, we have not afforded detailed attention to the
micro-level practices that evolved within individual banks,
in particular how their internal accounting and external
reporting processes were developed as the EP issue-based
?eld evolved. Future work should pay more explicit atten-
tion to the institutionalization processes at the organiza-
tional level in order to better explain and understand
these processes. This call is consistent with Greenwood,
Hinings, and Whetten’s (2014) recent request for more
studies examining how ?eld-level change in?uences actual
organizational behavior and related change. In particular,
we need to know more about the extent to which, and
the processes underpinning how, the competing institu-
tional logics we observed in this case were actually assimi-
lated at the organizational level (see, for example, Lee,
2015). Moreover, studies conducting comparative analyses
of the nature and extent of change within commercial
banks’ project ?nance credit risk analysis should help us
to better understand the possibly heterogeneous responses
of individual banks to the introduction of the EP, and the
factors that account for any potential differences.
While this paper privileges the perspectives of Equator
Principles Financial Institutions (EPFIs) and NGOs, given
their overriding in?uence on the process studied, it pays
less attention to the perspectives of wider Equator
Principles stakeholders such as affected communities, pro-
ject ?nance clients, consultants, lawyers, and socially
responsible investors. Researchers also need to seek out
broader Equator Principles stakeholder perspectives on
their experiences of the evolution of the EP, and EP issue-
based ?eld structuration subsequent to 2008, especially
those of EPFI clients. Finally, we are conscious of the fact
that the Equator Principles apply to a small proportion of
overall commercial bank lending activities and that, while
we have argued that they have had some positive in?uence
on EPFI social accountability, in the aftermath of the global
?nancial crisis, the issue of ?nancial institution social
accountability has taken on even greater signi?cance.
Future studies could therefore explore the implications of
the crisis for both current and future regulatory or policy
developments impacting on ?nancial institution social
accountability.
Acknowledgements
We would like to gratefully acknowledge the signi?cant
assistance of all of the interviewees who participated in
this study. We would also like to acknowledge the highly
helpful comments we received on earlier drafts of the
paper from the following individuals: Mary Canning,
David Cooper, Matthew Egan, Yves Gendron, George
Georgakopoulos, Matthew Hall, James Hazelton, Aziza
Laguecir, Bernard Leca, Jeffrey Unerman, and Charlene
Zietsma. We also received very helpful feedback from par-
ticipants at the following conferences and research semi-
nars: the Jill McKinnon Research Seminar Series,
Department of Accounting and Corporate Governance,
Macquarie University, March 2015; the 30th European
Group for Organizational Studies (EGOS) Colloquium,
Rotterdam School of Management (RSM), Erasmus
University, July 2014; the Alternative Accounts
Conference, Schulich School of Business, York University,
Toronto, April 2013; and the Bordeaux Management
School (BEM) Seminar Series, Bordeaux, France, March
2012. The comments of both reviewers were of great assis-
tance in helping us to develop and improve the paper. The
?nancial support of the KPMG Netherlands
Wetenschapscommissie is warmly appreciated.
Appendix A. List of acronyms
CSR Corporate Social Responsibility
CRBM Campagna per la Riforma della Banca
Mondiale
EP Equator Principles
EPFI Equator Principles Financial Institution
E&S Environmental and Social
FI Financial Institution
FOE Friends of the Earth
IFC International Finance Corporation
IRN International Rivers Network
NGO Non-Governmental Organization
OECD Organization for Economic Cooperation and
Development
RAN Rainforest Action Network
SPE Special Purpose Entity
WWF World Wildlife Fund
N. O’Sullivan, B. O’Dwyer / Accounting, Organizations and Society 43 (2015) 33–55 51
Appendix B. The differences between EP I and EP II
Issue Equator Principles I Equator Principles II
Eligible Parties Equator Banks Equator Principles Financial Institutions
(EPFIs)
Financial Threshold $50M US $10M US
Object of Assessment (Principle 1) Projects only Projects plus expansions and upgrades of
projects if the environmental and social
impact of the expansion or upgrade is
signi?cant
Scope of Activities (Principle 1) Lending Lending plus advisory activities
Scope of Assessment (For
category A and B projects)
(Principle 1 & 2)
Environmental assessment (EA)
only
Environmental assessment plus social
assessment (SEA)
Streamlining Assessment
(Principle 3)
No requirement Adopts a streamlined approach to
assessment of environmental and social
impacts to principally High-Income OECD
countries, where high standards for assessing
environmental and social impacts and IFC
performance standards and EHS Guidelines
exist
Action Plan and Management
System (Principle 4)
Environmental Management Plan
(EMP) for A and where appropriate
B projects
Action Plan (AP) and Management System for
A and B projects
Consultation (For category A and
where appropriate category B
projects) (Principle 5)
In a structured and culturally
appropriate way with project
affected groups. Aim for broad
community support for projects. EA
and EMP to take account of
consultations
In a structured and culturally appropriate
way with project affected communities. Prior
informed consultation (not prior informed
consent) for projects with signi?cant adverse
impacts. Consultation process and results to
be documented in AP
Grievance Procedures (Principle
6)
No requirement New requirement for borrower to establish
grievance procedure for project affected
communities throughout the project life
cycle
Independent Expert Review
(Principle 7)
EA, EMP and consultation for
category A projects
SEA and AP compliance and consultation for
category A and where appropriate category B
Legal Compliance Covenants
(Principle 8)
No requirement New requirement for borrower to comply
with local, state and host country
environmental and social laws, regulations
and permits in all material respects
Action Plan Compliance Covenant
(Principle 4 & 8)
Borrower to comply with EMP Borrower to comply with AP (where
applicable) in all material respects
Reporting Compliance Covenant
(Principle 8)
Borrower to provide regular reports
on compliance with EMP
Borrower to provide regular reports of
compliance with AP and host country laws,
regulations and permits
Decommissioning Covenant
(Principle 8)
Borrower to decommission
facilities in accordance with
decommissioning Plan, where
applicable
Same as EP I
Remedial Steps to Remedy
Covenant Breach (Principle 8)
Lender to engage with borrower to
remedy non-compliance with
covenants if borrower in default
EPFI reserves rights to exercise remedies for
non-compliance or default; and discretion to
work with borrower re covenant compliance
Appointment of Independent
Expert (Principle 9)
Lender discretion to appoint
independent environmental expert
to provide additional monitoring
and reporting services
EPFI to require appointment of independent
environmental and/or social expert, or
borrower to retain quali?ed and experienced
external experts to verify its monitoring
information for EPFIs over life of loan
Annual Reporting Obligations
(Principle 10)
No requirement New requirement for at least annual
reporting by EPFI
52 N. O’Sullivan, B. O’Dwyer / Accounting, Organizations and Society 43 (2015) 33–55
Appendix C
Code type Code name Explanation
Sample of Initial Interview Analysis Coding (1)
Core codes ACC Accountability
CD Collevecchio Declaration
EP I Equator Principles I
EP II Equator Principles II
EPFI Equator Principles Financial Institution
FI-NGO REL Financial institution-non governmental organization relationships
HIS History/background/interviewee role & responsibilities
INS Institutional (theory)
LEG Legitimacy
OC Organizational change
PF Project ?nance
RM Risk management
STK Stakeholder (originally referring to NGOs)
VOL Voluntary (versus regulation)
Sample of sub-codes (For) ACC Accountability
ACC/CC Commercial con?dentiality
ACC/DEF De?nitions (overlap with ACC/EPFI & ACC/NGO)
ACC/EPFI EPFI opinions on (EP) accountability (overlap with EP/ACC)
ACC/L Leaders
ACC/NGO NGO opinions on (EP) accountability (overlap with EP/ACC)
ACC/MON Monitor (as opposed to ‘‘felt responsibility’’)
ACC/RES Responsibility
ACC/TRANS/DIS Transparency, Disclosure
(For) PF Project ?nance
BPF Beyond project ?nance
PFM Project ?nance market (pressures/in?uence, overlap with EP/PF later)
(For) EP Equator Principles (I & II)
EP/ACC Accountability
EP/AD Adoption (objectives, etc.)
EP/BEN Bene?ts
EP/CAT Catalyst (overlap with BPF)
EP/GOV Governance (re structural requirements of the Principles & EPFI network/
members)
EP/IMP Implementation (guidelines, policies, training, ‘‘departments’’, structural
changes, actors, internal implementation audits, etc.)
EP/PF Project ?nance market (link PFM) & process (internal EPFI PF stages & EP
integration; lawyer & external consultant assistance; client implementation
& assessments, etc.
EP/R Revision of EP I
EP/S Scope (re design for ‘just project ?nance’, etc.)
EP/STR Structure (requirements, some overlap with EP/S & EP/ACC)
(continued on next page)
N. O’Sullivan, B. O’Dwyer / Accounting, Organizations and Society 43 (2015) 33–55 53
Appendix C (continued)
Code type Code name Explanation
(For) EPFI Equator Principles Financial Institutions
EPFI/C Clients (interaction/relationships, overlap with AG)
EPFI/Con Consultants (interaction/relationships, overlap with AG)
EPFI/LW Lawyers (interaction/relationships, overlap with AG)
(For) OC Organizational Change
OC/AG Agents/champions
OC/CUL Culture (re EPFIs)
OC/STR Structure (re EPFIs, merged into e.g. EP/IMP, EP/BEN later)
OC/BAR Barriers (overlap with OC/CUL and merged into e.g. ACC/CC later)
(For) RM Risk Management
RM/BUS Business case (for EPFIs)
RM/C Core risk management (i.e. credit, as opposed to just E&S)
RM/Com Competition (between EPFIs)
RM/E&S/EP E&S risk management & relationship with EP
(For) STK Stakeholders
STK/AD Advocacy (NGO campaigns)
STK/CC Campaign changes
STK/E Engagement
STK/R/P Role & power
STK/RD Reputational damage
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