Equinox uses a number of flexible abstractions (data models) that different workflows may compose and use in slightly different ways. This design allows flexibility towards implementing the growing range of sustainable finance and portfolio management applications.
Instead of a starting with an abstract discussion we will review first a number of specific use cases. This will make the final summary more concrete and usefu.
Implementing the Equator Principles database view
The Equator Principles Association collects and makes public a number of data points about Projects financed by participating financial institutions. Here we will illustrate some relevant concepts using the summary database provided by BankTrack
How we map the Project being financed to the Equinox concepts depends on what data is available about it. In this simplest of cases there is only a Project Name. There are three levels possible:
- The Project Asset Level, that is, assigning the project name to the concrete physical plants or facilities being developed. This level of granularity would be appropriate if, for example, we had GHG emissions data or other impact information.
- The Project Activities Level, that is, assigning the name to the group of activities that comprise the Project development. This is the appropriate level when, for example, one would like to implement the GHG Protocol for Projects.
- The Project Company Level, that is, assigning the name to the corporate entity (or possibly SPV) that will be the recipients of investments and lending products. This level would be required if, for example, we had specific financial product information.
The most appropriate in our use case if the Portfolio level, which automatically provides functionality for collecting projects on a portfolio basis.
In principle all business sectors are in scope of the Equator Principles reporting. The classification that is publicly available focuses on certain key sectors (Mining, Power, Infrastructure, Oil & Gas etc.).
This Sector hierarchy must be inserted into the Equinox database as user date. The concept available for that purpose is the Project Category. A flexible tree that can accommodate arbitrary hierarchies.
In principle Equinox accommodates Geospatial data but the highest resolution we have here is Country level which can be implemented as an attribute of Project.
Equinox does not implement an explicit “Bank” entity. What is available is instead a Portfolio Manager. An entity that is involved in one or more project financing operations.
A Project is thus part of a Project Portfolio, which in turn is managed by a Portfolio Manager, which in this use case is identified with the bank leading the Project Financing. Since Portfolios and Portfolio Managers have in this instance a one-to-one correspondence, for simplicity we label portfolios by the corresponding lead bank.
The Year refers to the Equator Principles reporting year. In Equinox we map this data point to the Portfolio Snapshot.