AIIB’s Climate Action Plan Underpins Commitment to Tackle Climate Change

Multilateral development bank the Asian Infrastructure Investment Bank (AIIB), has launched its inaugural Climate Action Plan (CAP), which the bank says is a milestone in its ongoing commitment to combatting climate change.

Designed to guide AIIB’s climate ambition from 2024-2030, the CAP brings together the principles governing AIIB’s climate financing while identifying crucial action areas that will steer its 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 mobilise 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.”

Contributing over 50% 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, the bank said.

AIIB’s CAP Outlines Four Principles:

  • Meeting Differentiated Member Needs for a Just Approach on Climate Finance: AIIB will tailor climate solutions to individual client needs and circumstances, recognising the diverse impacts of climate change across Asia and the variations in Members’ income levels, development pathways, and capacities to address climate change.
  • Taking a Holistic Approach: AIIB will focus on solutions that simultaneously mitigate climate change, build resilience, enhance adaptation, and offer co-benefits for biodiversity and nature conservation. Viewing nature as infrastructure and integrating nature-based solutions into infrastructure design will enhance climate resilience.
  • Mobilising Capital: Leveraging AIIB’s robust financial position and strengthening financing partnerships to mobilise capital for climate projects.
  • Facilitating Technological Innovation: Promoting innovation for both mitigation and adaptation efforts.

AIIB has set ambitious targets, committing to allocate at least 50% of its annual financing approvals as climate finance by 2025. In 2022, the bank attained a 56% rate. By the second quarter of 2023, the Bank had achieved a cumulative US$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.