Climate change is the critical challenge confronting Asia and the world. On all fronts, Asia urgently needs infrastructure that has climate resilience built in. That’s why, with our partnerships, network and resources, AIIB is focused on connecting capital to climate by unlocking finance, mobilizing funds into emerging economies, de-risking to build resilience and by helping countries adapt to climate change with investment in new innovative technologies and productive sectors.
AIIB has a track record in driving green finance initiatives within the environmental, social and governance (ESG) ecosystem and climate environment. Its decision-making is guided by its Environmental and Social Framework (ESF), which provides guidelines on how projects can manage environmental and social risks and impacts and achieve sustainable development outcomes. By partnering with various market participants, AIIB hopes to influence investing strategies and mobilize private capital for infrastructure to support the region’s sustainable development.
AIIB has been steadily building partnerships across the region to integrate environmental and social standards, and thus, climate adaptive responsive-behavior, in investment decisions. Among these are:
- A partnership with Amundi, Europe’s largest asset manager, to implement the AIIB-Amundi Climate Change Investment Framework, a benchmark tool that will for the first time holistically assess climate change risks and opportunities in line with the three objectives of the Paris Agreement at the issuer-level. The Framework translates the three key objectives of the Paris Agreement into fundamental metrics, equipping investors with a new tool to assess an issuer’s level of alignment with climate change mitigation, adaptation and low-carbon transition objectives. This Framework builds upon AIIB’s climate finance milestones to date. In 2019, the Bank launched the USD500 million AIIB Asia Climate Bond Portfolio to accelerate Members’ climate action, catalyze emerging market investment and address the underdeveloped climate-aligned bond market, providing a working model for the Framework. The portfolio will also function as the investment case for the Framework.
- Financing to L&T Infrastructure Finance Company Limited (LTIF), a subsidiary of L&T Finance Holdings Ltd. As an infrastructure financier, LTIF is the largest lender to greenfield renewable energy projects in India. It is now onlending or using the proceeds of AIIB financing to finance new solar and wind energy infrastructure projects in India, including a Vivid Solaire Energy wind power project (the Engie project) in the state of Tamil Nadu, India. The project is expected to contribute to greenhouse gas avoidance of around 990,000 tonne CO2 eq. per annum. These renewable energy projects will result in increased renewable energy capacity in India and help support the country's commitment to reducing its carbon intensity by 30-35 percent of 2005 levels under the Paris Agreement.