The Asian Infrastructure Investment Bank (AIIB) has vowed to align its operations with the goals of the Paris Agreement as the Beijing-led lender raises its annual climate finance commitments.
Currently, the China-led AIIB estimated its cumulative climate finance approvals to reach $50 billion by 2030. This amount would represent a fourfold increase in annual climate finance commitments since the bank started publicly reporting in 2019.
By July 1, 2023, AIIB added that its operations should be aligned with the goals of the Paris Agreement.
Earlier this year, the AIIB announced it would target at least a 50 percent share of climate finance in actual financing approvals by 2025.
“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,” Jin Liqun, AIIB president said in a statement.
“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,” he added.
Jin said enhancing investments in adaptation and resilience for low-income members and fostering emerging technologies to drive action on climate change are key focus areas.
The Paris Alignment commitment would apply to sovereign and nonsovereign projects, including investments made via financial intermediaries.
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.
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 accord to limit global warming to well below 2 degrees Celsius, preferably to 1.5 degrees, compared to 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. However, this will require a more focused approach to the adoption of new technology as an essential element of any comprehensive response,” Jin said.
“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,” he added.
An expanded focus on adaptation and resilience will complement the AIIB’s ambitious target of having climate finance represent 50 percent of financing approvals by 2025. Climate finance accounted for 41 percent of the bank’s infrastructure portfolio in 2020.