Asian Infrastructure Investment Bank aligns to Paris Agreement and sets out climate finance expectations up to 2030.
The Asian Infrastructure Investment Bank (AIIB) has announced that it will align its operations with the goals of the Paris Agreement by July 1, 2023. The Bank currently estimates its cumulative climate finance approvals to be $50bn by 2030, which would amount to a fourfold increase in annual climate finance commitments since AIIB started publicly reporting the number in 2019.
The Paris alignment commitment would apply to sovereign and non-sovereign projects, including investments made via financial intermediaries. The bank is also 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.
Jin Liqun, president and chair of the board of directors at AIIB, said: “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. Today’s 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.”
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 may be far too low for the international community to meet the temperature goal of the Paris Agreement to limit global warming to well below two degrees Celsius, preferably to 1.5 degrees, compared to pre-industrial levels.
The AIIB’s president Jin sees leveraging emerging technologies as key to raising climate ambition, saying: “As an MDB located in the hub of innovation, we believe that technology can act as a lever to curb greenhouse gas emissions. 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 impact on climate change.”
Climate change is taking a major toll on developing countries and annual resilience costs alone are estimated to reach $300bn in 2030.
“There is no one-size-fits-all solution. Properly funding adaptation recognises that this work may require fundamental shifts in infrastructure and our behaviour. Flood walls, improved building standards, resilient infrastructure are all tools we have at our disposal. But access to funds to implement these measures is vital, especially in developing countries,” said president Jin.