Asian Infrastructure Investment Bank

Standalone climate strategy and integration of climate in overarching strategy

This page is part of the E3G Public Bank Climate Tracker Matrix, our tool to help you assess the Paris alignment of public banks, MDBs and DFIs.

Share
Paris alignmentReasoning
UnalignedAIIB does not have a standalone climate strategy. The Corporate Strategy briefly mentions climate change. Alignment with the Paris Agreement is missing.
Climate strategyOverarching strategy
AIIB does not have a standalone climate strategy.The AIIB Corporate Strategy briefly mentions climate change. Alignment with the Paris Agreement is missing.

 

Explanation

Overarching strategy

The mission of AIIB is to be “lean, clean and green”. One of its thematic priorities is sustainable infrastructure. In its 2017 agenda it states that its aims are to “green infrastructure and supporting countries to meet their environmental and development goals”.

The AIIB addresses climate change in its Corporate Strategy, as being part of a triple approach to sustainability (Economic, Social and Environmental). It further commits AIIB to foster climate-resilient and emissions-reducing infrastructure to implement the Paris Agreement. The strategy further states that it prioritizes green infrastructure and support for its member to achieve their environmental and related development goals by financing projects that deliver local environmental improvements and investments dedicated to climate action. The AIIB understands green infrastructure to include projects that support climate change efforts and help members meet their other environmental and related development goals, including their Nationally Determined Contributions (NDCs) in line with their Paris Agreement commitments.

The AIIB Corporate Strategy also reiterates the Bank’s goal to achieve a 50% share of climate finance by 2025 in its financing approvals. This is also aligned with its Energy Sector Strategy. In supporting green infrastructure, AIIB will mainstream climate change priorities into decision-making across its operations and will apply the necessary tools and instruments (e.g., shadow carbon pricing and greenhouse gas (GHG) emission accounting) in the economic analysis of its projects. AIIB will also continue tracking GHG emissions reductions via its Energy Sector Strategy and, over time, build capacity to measure GHG emissions of transport infrastructure.

Specifically, the AIIB Corporate Strategy states that:

“Reflecting its commitment to support the Paris Agreement, AIIB will aim at reaching or surpassing by 2025 a 50 percent share of climate finance in its actual financing approvals. Following the important steps it has taken in international fora, AIIB will also continue to be an active participant in the development of the Joint MDB Framework on Paris alignment and align its relevant policies, strategies and operations with the Framework once it is fully developed and agreed upon.”

The Corporate Strategy does not include a specific target date for the full alignment of the AIIB with the Paris Agreement .

Recommendation: AIIB should publish as soon as possible a detailed roadmap and timeline for the bank to achieve full Paris Agreement alignment, as other MDBs such as EIB and EBRD have done. It does not have to wait for the Joint MDB Paris Alignment Framework to be fully developed and agreed in order to do this, as evidenced by these other banks.

Standalone climate strategy

AIIB does not have a standalone climate strategy.

The bank’s Environmental and Social Framework (ESF) is under review and this process is expected to conclude in Q4 of 2020. The current version of the Environmental and Social Framework mentions “measures for climate change” and “support for green economic growth” as two of several elements within its vision. On the measures for climate change, it refers to the Paris Agreement and both mitigation and adaptation as key elements to achieve Paris goals. The ESF states that it prioritises “investments promoting greenhouse gas emission neutral and climate resilient infrastructure, including actions for reducing emissions, climate-proofing and promotion of renewable energy”. It also emphasises that the bank is ready to support its clients to finance their NDCs.

Recommendation: AIIB should consider developing a standalone climate strategy that clearly outlines how it will align itself with the Paris Agreement.


 

Last Update: November 2020

Subscribe to our newsletter

    Privacy and Cookie policy