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On 14th September 2021, the Third Plenary Meeting of the Green Investment Principles for the Belt and Road (GIP) successfully concluded in Beijing. More than 170 representatives from over 50 global financial institutions and organizations participated in person or virtually.
At the Plenary Meeting, the GIP secretariat released The Second GIP Annual Progress Report, titled “Stepping into the Net Zero Era”. Drawing from our members’ responses to a series of questionnaires, the annual report captured the substantial progress made by GIP signatories in delivering green investment and enhancing green governance in the past year.
Since 2018, the GIP membership has expanded to 40 signatories and 12 supporters from 15 countries and regions along the Belt and Road. These signatories currently hold or manage USD49 trillion in total assets, accounting for the largest source of private capital invested in developing countries. During the past 12 months, member-led working groups have successfully hosted four capacity-building events and developed many tools and casebooks, including casebooks on best practices, an online toolbox for risk assessment, and a green project database.
According to the Second Annual Report, the GIP signatories have declared enhanced climate ambitions (on increasing green financial activities and curbing carbon-intensive ones), comprehensiveness of environmental and climate risk assessments, as well as the scopes and depths of environmental and climate disclosures.
“Green and openness remain essential elements of the BRI, where the GIP can play a stronger role, including by encouraging adoption of international standards in sustainability, or China’s own standards, in the case where local standards are too low or not in place”, said Deputy Governor Chen Yulu of the People’s Bank of China in his keynote speech.
2021 marks the first year of the GIP medium-term strategic plan titled “Vision 2023”, which set targets for members to raise green investment performance. Over the past year, the GIP community reached or exceeded most of the first-year targets set under the five key pillars on impact assessment, disclosure, commitment, investment, and growth. As of today, 50% of the GIP reporting signatories have developed or are developing policies to divest from fossil fuels with increasing commitments to total phase-out, while 58% of them have set green investment targets quantifiable in volume or proportion.
At this year’s annual meeting, 12 members received GIP awards for outstanding performance in GIP implementation, leadership in capacity building, and contribution as supporting institutions.
Dr. Ma Jun, the Co-Chair of the GIP Steering Committee and Chairman of Green Finance Committee of China Society for Finance and Banking, said:
“The past three years have seen the collective efforts and solid progress of GIP members in building capacity for green investments. Looking forward, we hope that GIP members can scale up ambitions and act in solidarity towards the Paris Agreement goals, with the launch of more regional chapters and the development of more effective analytical tools, to help accelerate the decarbonization of the real economy along the Belt and Road and grasp the opportunities brought by the new Net Zero Era.”
Alderman William Russell, the Lord Mayor of the City of London, and Co-Chair of the GIP Steering Committee, also underscored the role of the GIP:
“When we consider green economic growth – as we are all working towards our respective net-zero goals – these Green Investment Principles offer us a structure in which to reach our goals. They raise awareness of climate risks within emerging markets and they have helped many financial services with disclosing measures – the importance of which cannot be understated. These Principles have strengthened the green finance partnership between our countries.”
In 2021, the GIP Secretariat has extended its service to more regions along the Belt and Road by launching a regional office in Central Asia, chaired by Mr. Yaseen Anwar, the former governor of the central bank of Pakistan, with support from the AIFC Green Finance Centre.
“The Belt Road Initiative (BRI) is vital for global economic growth. The GIP, in harmony with Paris Climate Accord and United Nations ESG guidelines, adds enormous credence to BRI’s mandate in converging its own objectives with BRI globally towards a viable Green Finance Ecosystem for the long-term betterment of a carbon-neutral world,” said Yaseen Anwar at his opening remarks.
The GIP annual report identified specific areas requiring greater efforts, including the disclosures of financial institutions’ exposures to carbon-intensive assets and the carbon footprints of financial assets. According to the work plans submitted by the various GIP working groups, this new year will see more awareness-raising and capacity-building activities in managing climate-related transition risks, enhancing climate disclosures, and steering investment mixes towards carbon neutrality.