What are four principles at heart of AIIB’s Climate Action Plan?

What are four principles at heart of AIIB’s Climate Action Plan?
26 / 09 / 2023
بقلم Marwa Nassar - -

The Asian Infrastructure Investment Bank (AIIB)’s Climate Action Plan (CAP) outlined four principles; Meeting Differentiated Member Needs for a Just Approach on Climate Finance, Taking a Holistic Approach, Mobilizing Capital, and Facilitating Technological Innovation.

Under the first principle of Meeting Differentiated Member Needs for a Just Approach on Climate Finance, AIIB will tailor climate solutions to individual client needs and circumstances, recognizing the diverse impacts of climate change across Asia and the variations in Members’ income levels, development pathways and capacities to address climate change.

Under the principle of Taking a Holistic Approach, AIIB will focus on solutions that simultaneously mitigate climate change, build resilience, enhance adaptation and offer cobenefits for biodiversity and nature conservation. Viewing nature as infrastructure and integrating nature-based solutions into infrastructure design will enhance climate resilience.

The Mobilizing Capital principle focuses on leveraging AIIB’s robust financial position and strengthening financing partnerships to mobilize capital for climate projects.

The last principle of Facilitating Technological Innovation concentrates on promoting innovation for both mitigation and adaptation efforts.

Designed to guide AIIB’s climate ambition from 2024-2030, the CAP brings together the principles governing the Bank’s climate financing while identifying crucial action areas that will steer AIIB’s investments in support of its Members.

The document is a statement of intent to AIIB’s Members and partners. The CAP is a compass for crafting climate solutions and directing climate financing. It is a dynamic framework that can evolve to stay pertinent and impactful as the ramifications of climate change intensify.

“The Climate Action Plan demonstrates AIIB’s ambition to mobilize our capital, capacity and convening power to help our members in their efforts to address climate change,” said AIIB President and Chair of the Board Jin Liqun. “AIIB stands by our members in the face of climate challenges ahead. We must work together to rapidly reduce greenhouse gas emissions, strengthen resilience against the coming wave of extreme weather events, and safeguard the natural capital that makes life on earth possible.”

The battle against climate change will be decided in Asia, an engine of global economic growth facing heightened vulnerability to climate hazards. Contributing over 50 percent of global greenhouse gas emissions, Asia’s effectiveness in addressing its unique climate challenges is of paramount importance to the sustainability of societies worldwide. Early action offers the opportunity to bend the emission curve, support a just transition and pave the path toward low-carbon development while avoiding the legacy issues experienced by developed economies.

AIIB has set ambitious targets, committing to allocate at least 50 percent of its annual financing approvals as climate finance by 2025. In 2022, the bank attained a 56-percent rate. By the second quarter of 2023, the Bank had achieved a cumulative USD 11.75 billion in climate finance and has financed 107 projects with climate components. In 2023, AIIB issued Asia’s first adaptation bond, demonstrating its commitment to climate resilience. AIIB now aligns all new investments with the principles of the Paris Agreement as of July 1, 2023.

“This document marks one of the many important steps we must collectively take in our pursuit of a sustainable world free from climate havoc and other natural disasters to the greatest extent possible. We are moving forward on the right course, driven by the understanding that our actions today will shape the destiny of generations to come,” President Jin concluded.

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