now loading...
Wealth Asia Connect Middle East Treasury & Capital Markets Europe ESG Forum TechTalk
ESG Investing / Treasury & Capital Markets
AIIB commits to fully align operations with Paris goals
Private sector, institutional investors – and emerging technology – key to combating climate change
The Asset 27 Oct 2021

The Beijing-based Asian Infrastructure Investment Bank (AIIB), which currently estimates its cumulative climate finance approvals to be US$50 billion by 2030, has announced that it will align its operations with the goals of the Paris agreement by July 1 2023.

The US$50 billion represents a fourfold increase in annual climate finance commitments since AIIB started publicly reporting the number in 2019. The commitment will apply to sovereign and non-sovereign projects, including investments made via financial intermediaries.

Earlier this year, the multilateral bank said it would target at least a 50% share of climate finance in actual financing approvals by 2025, making its recent announcement an important step towards achieving this goal. Climate finance accounted for 41% of the bank’s infrastructure portfolio in 2020.

“We are at a defining moment in history, one which calls for bold, fast and wide-ranging collective action if we are to limit global warming and protect our fragile planet,” says Jin Liqun, AIIB’s president. “[This] announcement reinforces AIIB’s long-standing pledge to support climate action in line with the Paris agreement. We think the way forward needs greater participation by the private sector on all fronts, so that we can collectively deliver on the promise of building an inclusive, equitable and sustainable future.”

Key focus areas for the bank to drive action on climate change, Jin adds, are fostering emerging technologies and enhancing investments in adaptation and resilience for low-income members. An expanded focus on adaptation and resilience will complement the bank’s ambitious target of having climate finance represent 50% of AIIB’s financing approvals by 2025. 

AIIB is currently testing a rigorous process to ensure projects meet low-carbon and climate-resilient standards consistent with the Paris accord. The approach draws on the international standards and frameworks currently being developed in collaboration with other multilateral development banks (MDBs).

In the lead-up to COP26 in November, more than 130 countries have set or are considering a net-zero carbon emissions target by 2050. However, the current level of ambition set out in these plans is, in aggregate, still far too low for the international community to meet the temperature goal of the Paris agreement to limit global warming to well below 2 degrees Celsius, preferably to 1.5 degrees, compared with pre-industrial levels. AIIB sees leveraging emerging technologies as key to raising climate ambition.

“As an MDB located in the hub of innovation, we believe that technology can act as a lever to curb greenhouse gas emissions,” Jin shares. “However, this will require a more focused approach to the adoption of new technology as an essential element of any comprehensive response to global climate change. Ultimately, we need the private sector and institutional investors to come to the table to partner with us so that we can combat the worst impacts of climate change.”

Conversation
Edwin Gutierrez
Edwin Gutierrez
head of emerging market sovereign debt
abrdn
- JOINED THE EVENT -
18th Asia Bond Markets Summit - Europe Edition
Taking advantage of the great bond re-set
View Highlights
Conversation
Justin Ong
Justin Ong
Asia Pacific asset wealth management leader
PWC
- JOINED THE EVENT -
In-person roundtable
Asia and the future of funds
View Highlights