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AIIB launches sustainable development bond framework
Bank seeks to enhance transparency on use and management of bond proceeds
21 Apr 2021 | The Asset

The Asian Infrastructure Investment Bank (AIIB) has launched a new framework to help the investor community better assess how the development bank is living up to its sustainability commitments. The Sustainable Development Bond Framework outlines how the AIIB is adhering to the principles set out in its environmental and social framework that guides project selection, and how it is helping its members to meet their commitments under the Paris Agreement and the United Nations’ Sustainable Development Goals.

The document presents a summary of the policies, strategies, processes and mechanisms that govern AIIB’s commitment to sustainable financing activities. It also increases transparency around the bank’s operations by setting out the use and management of proceeds, and how it tracks the impact of its financing.  

Under the framework, annual reporting on the bank’s overall portfolio level and project-level environmental and social benefits will be made available on the AIIB official website.

“The Sustainable Development Bond Framework is designed to facilitate bond investors’ assessment of AIIB’s commitment to sustainable development. It also increases the transparency of the environmental and social impact generated by AIIB financing,” says AIIB treasurer Domenico Nardelli. “Under its mission of Financing Infrastructure for Tomorrow, AIIB will continue to scale up its sustainable and inclusive investments to meet clients’ needs for low-carbon and climate-resilient infrastructure.”

The framework applies to all debt issued by AIIB in all markets and currencies. The banks says all of its bonds are sustainable development bonds, providing investors with an opportunity to improve social and economic outcomes in Asia. With a borrowing programme of US$10 billion for 2021, AIIB will continue to build its presence in the capital markets as a frequent borrower.

The framework was designed with Crédit Agricole CIB as sole structuring adviser on sustainability.  

The AIIB is rated by three ESG rating agencies: ISS ESG, Sustainalytics, and Vigeo Eiris. The ratings are solicited by investors and are based on industry-specific environmental, social and governance criteria.