Moving beyond rhetoric: How the AIIB can close the loophole on fossil fuels
...To live up to its promises to be “green” and to its stated commitment to the Paris Agreement and the Sustainable Development Goals, the AIIB should:
• Match the World Bank’s recent commitment to end financing for oil and gas extraction, and establish a plan to phase out remaining investment in fossil fuels by 2020.
• Set an institutional target for GHG emissions reductions across the AIIB portfolio, and start measuring and publicly disclosing GHG emissions for all its projects and sub projects.
• Prohibit financing of coal for any purpose, including for power generation, for industrial processes and for coal-mining – both via direct and indirect lending.
• Prioritise off-grid, renewable energy projects, and ring-fence dedicated funds to provide energy access for poor and underserved communities.
• Establish a results measurement framework that assesses how the AIIB is performing against SDG7, to ensure access to affordable, reliable, sustainable and modern energy for all, and aligning its finance to the Paris goals.
• Contractually require FI clients to publicly disclose all AIIB sub-investments at the earliest stages, including names, locations, amount of investment and all environmental and social impact documentation, and permit the AIIB to disclose the information on its website. A provision requiring this disclosure of FI sub-projects should be included in the AIIB’s forthcoming Public Information Policy.
• Require FI sub-projects to comply with all AIIB policies, relevant sectoral strategies and guidelines, including the full set of environmental and social standards that apply to direct investments. Ensure FI sub-projects remain accountable to AIIB oversight and due diligence at all stages of the project cycle.