Out-Law News | 25 Apr 2021 | 1:57 am |
The Asian Infrastructure Investment Bank (AIIB) has launched a new framework to help investors make a better assessment of how the development bank is fulfilling its sustainability commitments.
A document released by the AIIB outlines the policies, strategies, processes and mechanisms that regulate the AIIB's commitment to sustainable financing activities.
The framework applies to all debt issued by the AIIB in all markets and currencies, an AIIB statement said. It has five components, including the use of proceeds, the process of project appraisal and selection, and the management and reporting of proceeds.
AIIB uses a five-step process to select sustainable financing projects, including project screening, preparation and due diligence, approval, implementation and monitoring, and completion and evaluation.
Under the framework, AIIB will publish its annual reports on of the environmental and social benefits of the Bank's overall portfolio level and project level on its website.
Finance expert Kanyi Lui of Pinsent Masons, the law firm behind Out-Law, said: “Delivering infrastructure and growth in a sustainable and inclusive manner is the challenge for our generation. The pandemic has forced us all to rethink infrastructure and look beyond traditional projects such as power and transportation to things like health, education and digital infrastructure. There is tremendous appetite for green and sustainable finance and the framework will provide useful guidance for investors.”
AIIB Treasurer Domenico Nardelli said that the framework "improves the transparency of the environmental and social impacts generated by AIIB financing".
The framework was designed by Crédit Agricole as the sole structural advisor for sustainable development.