On 12th September 2019, a discussion centered on "Aligning Multilateral Finance with the Paris Agreement: Looking at the Asian Infrastructure Investment Bank(AIIB)" between the AIIB and representatives from civil society organizations, non-governmental organizations and academia was held online. Together with European-based climate think tankE3G, German-based CSO Germanwatch and the AIIB, GHub coordinated and organized this webinar.
The webinar was attended by 38 participants, including experts, activists and scholars focusing on climate change, multilateralism or, more specifically on the AIIB, in addition to specialists from the energy sector, the social sector and the department of communication of the AIIB.
The primary motivation behind this event was that,according to climate scientists, this summer has surpassed all previous records for the highest global temperature. The impact of climate change has permeated every aspect of human production and livelihood, necessitating swift action on the part of stakeholders. With the significant role that infrastructure plays in achieving the Sustainable Development Goals (SDGs) and the 1.5 degree target set out in the Paris Agreement, multilateral development banks (MDBs) should take key responsibilities to encourage their recipient countries in developing more sustainable and climate-resilient infrastructure. In fact, the determination to take action has been emphasized on multiple occasions by many influential actors such as multilateral financial institutions, including the AIIB.As a bank born from the aftermath of the 2015 Paris Agreement, AIIB has underlined its desire to be a “lean, clean and green” bank. In particular, at the 4th annual meeting in Luxembourg, AIIB emphasized its determination to tackle climate change. This webinar aims to identify opportunities on how the bank and civil society can find policy-based solutions to face the pressing climate challenge based on existing research findings.
Underpinned by recent analysis and research conducted by environmental institutions on opportunities and challenges faced by MDBs when aligning with the goals of the Paris Agreements and regarding past, present and committed actions to be taken by the AIIB, the webinar brought together four experts from Germanwatch, E3G and the AIIB. During the sharing session, four experts respectively shared their related analysis, perspectives, concerns and future plans for the AIIB and sustainability in the infrastructure sector. Below are the summaries and highlights from each speaker:
Infrastructure projects, by their nature, are designed to be long-lasting. As such, infrastructure investments financed today are expected to be operational for the foreseeable future. Combined with the fact that the global inventory of infrastructure is expected to rapidly develop in the coming years, especially in the ‘Global South’, infrastructure represents a challenge in the quest for Paris-alignment in the 21st century. Even though MDBs loans to sustainable infrastructure area small part of the total funding required, they play an important role in catalyzing other sources of finance. It is suggested that, given MDBs positions, the influence from them could be more significant by shifting from project level to system or institutional level.
Dileimy Orozco, Policy Advisor, E3G:
Furthermore, it is recommended that by improving upon their capacity to undertake sustainability assessments, following trends in technology and by strengthening existing infrastructure safeguards, International Financial Institutions (IFIs) will more effectively equipped to achieve SDG and Paris-alignment.
Sophie Bartosch, Policy Advisor, Germanwatch
According to research regarding the identification of gaps and alignments of the AIIB's different policies, strategies and investment portfolio with reference to global climate goals, the AIIB is expected to refine and further define their investment policies to reflect its climate commitments, in order to seal gaps and maximize their sustainability potential. For example, as the AIIB committed to the joint MDB pledge to develop and operationalize a "Paris alignment approach" in 2018, it is suggested they adapt approaches such as extending the investment exclusion list to be aligned with the Paris Agreement, identify sector or portfolio targets of life-time emissions from their overall portfolio to encourage decarbonization by 2050, and seek innovative methods and instruments for small-scale socially inclusive, low-carbon and climate-resilient projects.
David Morgado, Senior Energy Policy specialist, AIIB &Courtney Lowrance, Principal Environmental Specialist, AIIB:
AIIB is stepping-up to the Paris-Alignment by setting specific tasks and strategies, such as the Asia Climate Bond Portfolio and ESG Enhanced Credit Portfolio to face the climate challenge head-on. Moreover, AIIB will function in the climate of tomorrow by continuing to increase its work toward addressing climate change through greater alignment with 1.5-degree pathways, increasing the Bank’s investments in low-carbon energy sources and employing greater use of innovative financing instruments to fund sustainable infrastructure.
During the discussion session afterwards, participants and invited experts discussed topics ranging from AIIB's commitment, policies, investment activities and project decisions under the background of its commitments towards 1.5 degree goal as well as member countries' nationally determined contributions targets.
During the webinar, experts from the AIIB expressed the bank's openness and welcomeness to civil society organization proposals particularly within energy sub sectors such as solar energy, offshore wind, battery storage and energy efficiency. Meanwhile, the participants expressed interest in having further and more in-depth dialogue and engagement with the Bank in the future.
