AIIB: Overview

Founded:
2015
Mission:
"To improve social and economic outcomes in Asia."
Total assets:
$27 billion
Headquarters:
Beijing, China
Top five shareholders:
China, India, Russia, Germany, South Korea and Australia.
Summary of Paris alignment assessment:
The Asian Infrastructure Investment Bank was created after the Paris Agreement and therefore has an opportunity to fully integrate the commitment to the Paris Agreement goals in all its policies and structures. It does however have room for improvement across all criteria included in this study. It has been classified as being ‘not-aligned' on most indicators which is only partially explained by the fact that it is a new institution and still in the process of putting policies in place. Areas to prioritise include the creation of a standalone climate strategy, project-level reporting of GHG emissions (it is understood that some examples are in pipeline), developing fossil fuels exclusion policies and the implementation of a climate risk framework.

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.

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MetricSummary
Promotion of green financeSome progress – AIIB is gradually doing more and more promotion of green finance among market participants and institutions. 
 Fossil to non-fossil energy finance ratio and scaling up climate financeUnaligned – The AIIB has funded more fossil fuels than renewables between 2016-2018. For every $1 the AIIB provided to fossil fuels, $0.4 went to renewables and $0.3 went to energy networks (transmission and distribution).  
Nature based solutionsUnaligned – Limited or weak commitments on nature based solutions and biodiversity.
Climate risk, resilience, and adaptationSome progress – Risk management approach does not include assessing climate risk at project level. The AIIB uses ThinkHazard! Tool to enhance client climate resilience.
Overarching climate strategyUnaligned – AIIB does not have a standalone climate strategy. The Corporate Strategy briefly mentions climate change. Alignment with the Paris Agreement is missing. 
Integration of climate mitigation and resilience in key sectoral strategiesUnaligned – AIIB’s sectoral strategies provide sporadic insights into the integration of climate change into various sectors. However, despite the strategies being among the most recent amongst all MDBs, Paris alignment is not mentioned. There is no strategic approach to mainstream climate into AIIB’s sectoral lending.
Institutional leadershipSome progress – The Bank has the potential to introduce transformational practices amongst the MDBs, but there has not yet been enough time to judge the effect of their efforts. 
Energy access and fuel povertyUnaligned – AIIB has included energy access within its wider energy strategy, but has not set a Bank-specific target and progress monitoring does not account for clean or modern energy. 
Energy efficiency strategy, standards and investmentSome progress – The importance of energy efficiency is recognised but this needs operationalising.   
Fossil fuel exclusion policiesUnaligned  – No formal coal exclusion policy. Lacks downstream oil and gas policies. Upstream oil and gas permitted. 
Greenhouse gas accounting and reductionUnaligned – Portfolio-level monitoring of greenhouse gas (GHG) emissions for energy sector only. No project-level reporting yet (although some projects in pipeline) and no targets.
Shadow carbon pricingSome progress – The AIIB has started to apply internal carbon pricing systematically to energy projects only since July 2020.   
Country level work Not applicable – AIIB does not have country-level strategies.
Technical assistance for implementing Paris goalsNot applicable – AIIB does not provide technical assistance, but recognition of role in energy sector. 
Transparency of climate finance dataSome progress – Transparency of financial intermediary lending needs improving. 

Top recommendations

  • AIIB should create a standalone climate change strategy, fully linked to its Corporate Strategy. 
  • AIIB should look to implement further climate risk management systems across its portfolio and establish a project-level climate risk process.  
  • AIIB should actively seek to translate its management’s position on fossil fuels and specifically coal into its official lending policy. 
  • AIIB should consider setting up technical assistance programmes, including climate-related technical assistance to address upstream barriers in client countries.

Leadership area

The AIIB leadership has gone to great lengths to make clear that it has no coal in its pipeline and has no intention to finance any coal projects. This shows leadership within Asian financial institutions, and other development banks should follow suit. The President of the AIIB, Jin Liqun, has stated that “there are no coal projects in our pipeline, and we will not consider any proposals if we are concerned about their environmental and reputational impact“. AIIB Vice-Presidents Joachim von Amsberg and Thierry de Longuemar have both also stated that the Bank will not fund coal. AIIB has also shown leadership on climate bonds and on raising awareness of environmental, social and governance issues in the Asia region. 

Last updated: November 2020.

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