Nature based solutions

Explanation

Nature based solutions

The AIIB Sustainable Cities Strategy covers investments that “enhance resilience against climate change and natural disasters, including through nature-based solutions where feasible, within urban boundaries” within its main investment areas. Other than this strategy, there does not appear to be any publicly available reference to nature based solutions to climate mitigation and adaptation in AIIB publications. The AIIB Water strategy contains a brief mention of nature based solutions.

Biodiversity

The AIIB Environmental and Social Framework, which is currently under review, excludes “activities prohibited by national or international conventions (i.e. regarding biodiversity)”. AIIB should outline in detail the concrete implications for its lending operations.

In the framework, AIIB states that it “recognizes the value of natural infrastructure, such as wetlands, and the importance of enhancing or restoring ecosystem services where appropriate.”

The AIIB’s Environmental and Social Framework (ESF) also excludes significant conversion or degradation of habitats, but offers project promoters two ways of getting around this requirement:

“If the Project has to be implemented in an area of natural habitats, ensure there will be no significant conversion or degradation; and if feasible alternatives are not available, ensure that: (a) the Project’s overall benefits substantially outweigh the environmental costs; and (b) any conversion or degradation is appropriately mitigated through measures acceptable to the Bank. Ensure that these criteria are applied when proposed actions under the Project could potentially cause deforestation or conversion of natural forests.”

Furthermore the AIIB states that projects should “avoid adverse project impacts on biodiversity. When avoidance of adverse impacts is not possible, implement measures to minimize adverse impacts and restore biodiversity, including, as a last resort, biodiversity offsets.”

The AIIB suggests “co-locating” projects, building on land that is already degraded or converted,  using the banks “mitigation hierarchy” to address necessary degradation and compensating ecosystems and forestry where available. The Bank does not appear to give any specific, quantitative measures for their mitigation hierarchy, or any other aspects of their environmental guidelines.

Notably, the Bank does not rule out working within nationally or internationally protected land, nor does it rule out the possibility of working on a project that has already caused environmental harm.  The ESF states financial intermediary sub-projects will be monitored and assessed against the ESF, particularly the exclusionary list, but there are questions with regard to the implementation of this commitment (see also this report from Bankwatch).

Overall the AIIB’s commitments in this area appear to be caveated.

Agriculture

Rural infrastructure and agriculture development is stated as one of the focus areas of AIIB, however there is little to no information available as regards the environmental standards it applies to agricultural investments.

Forestry

The AIIB Environmental and Social Framework  excludes “commercial logging or production of equipment for tropical moist forests and old-growth forests” and the “production/trade in wood and other products not from sustainably managed forests”. Following a request from E3G, AIIB has stated that it is not invested in forestry projects.