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Accelerating Green BRI Investments: Alignment and Implementation of the Green Development Guidance for BRI Projects (GDG) and the Green Investment Principles for the Belt and Road (GIP)

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Abstract and Figures

Since 2013, Chinese and foreign partners have been actively exploring through policy release, joint research, dialogue and exchange, and capacity building to promote the development of green finance, strengthen the BRI ecological and environmental risk prevention and management, further improve the green investment and financing system, and continuously improve the ecological and environmental risk management level of foreign investment projects. Two most important pillars in this regard are the Green Development Guidance for BRI projects (Green Development Guidance, GDG), published by the Belt and Road Initiative International Green Development Coalition (BRIGC), and the sector-led Green Investment Principles for the Belt and Road (Green Investment Principles, GIP), jointly published by the China Green Finance Committee and the City of London. This short report compares these two initiatives and makes recommendations regarding their further alignment and implementation. It draws on two training workshops on BRI green finance, and two harmonization workshops on synergizing GDG and GIP, held over the course of 2021. These were co-hosted by BRIGC, the Beijing Institute of Finance and Sustainability, and ClientEarth with support by the Green Finance & Development Center at FISF Fudan University as part of a project funded by UK PACT.
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Alignment and Implementation of the Green
Development Guidance for BRI Projects
(GDG) and the Green Investment Principles
for the Belt and Road (GIP)
Accelerating Green
BRI Investments
SUPPORTED BY
GIP
GIP
Green
Investment
Principles
Green
Investment
Principles
GIP
Green
Investment
Principles
GIP
Green
Investment
Principles
北京绿色金融与可持续发展研究院
Table of Contents
4 Executive Summary
6 Introduction: The Green Development Guidance and Green
Investment Principles for the Belt and Road Initiative
7 Comparative assessment of the GDG and the GIP
7 Overview of the GDG and the GIP
9 Similarities and Overlaps of the two frameworks
9 Complementarity of the two frameworks
11 Implementation of the GDG and the GIP
11 Implementation of the Green Development Guidance
12 Implementation of the Green Investment Principles
15 Recommendations for Collaboration between the GDG
and the GIP
List of Tables & Figures
7 Table 1. Comparison of Green Development Guidance (GDG) and
Green Investment Principles (GIP) for greening nance in the Belt and
Road Initiative (BRI)
10 Table 2: Dierent Approaches of the GDG and the GIP
12 Figure 1: Evaluation process according to the Implementation Guidefor
the Green Development Guidance
13 Figure 2: Potential decision-making process for Green BRI
Guidanceimplementation (project approval)
14 Figure 3: Themes and Sub-themes for Performance Evaluation from
the GIP annual report
3
Accelerating Green BRI
Investments: Alignment and
Implementation of the Green
Development Guidance for BRI
Projects (GDG) and the Green
Investment Principles for the Belt
and Road (GIP)
January 18, 2022, Beijing
Authors:
Christoph NEDOPIL WANG, Director Green Finance & Development Center,
Associate Professor Fudan University
Cheng Lin, Secretariat of the Green Investment Principles for the Belt and
Road Initiative
Chen Yunhan, Secretariat of the Green Investment Principles for the Belt and
Road Initiative
Li Panwen, Senior Programme Manager, BRIGC Secretariat
Fan Danting, Green Finance and Climate Lawyer, China Office, ClientEarth
Advisors:
Ma Jun, Advisor of the BRIGC Advisory Committee, Chairman of Green
Finance Committee of China Society of Finance and Banking, President of
Beijing Institute of Finance and Sustainability
Li Yonghong, Deputy Director General, Foreign Environmental Cooperation
Center (FECO), MEE
Dimitri de Boer, Chief Representative, China Office, ClientEarth
4
Executive Summary
Finance is a key lever to greening the Belt
and Road Initiative (BRI). In his keynote
speech at the Boao Forum for Asia Annual
Conference 2021, President Xi Jinping
stated to strengthen cooperation on green
infrastructure, green energy and green
nance, and improve the BRI International
Green Development Coalition (BRIGC), the
Green Investment Principles for the Belt and
Road (GIP), and other multilateral cooperation
platforms to make green a dening feature of
Belt and Road cooperation.
Since 2013, Chinese and foreign partners have
been actively exploring through policy release,
joint research, dialogue and exchange, and
capacity building to promote the development of
green nance, strengthen the BRI ecological and
environmental risk prevention and management,
further improve the green investment and
nancing system, and continuously improve the
ecological and environmental risk management
level of foreign investment projects. Two most
important pillars in this regard are the Green
Development Guidance for BRI projects (Green
Development Guidance, GDG), published by
the Belt and Road Initiative International Green
Development Coalition (BRIGC), and the sector-
led Green Investment Principles for the Belt and
Road (Green Investment Principles, GIP), jointly
published by the China Green Finance Committee
and the City of London.
This short report compares these two initiatives
and makes recommendations regarding their
further alignment and implementation. It draws
on two training workshops on BRI green nance,
and two harmonization workshops on synergizing
GDG and GIP, held over the course of 2021. These
were co-hosted by BRIGC, the Beijing Institute of
Finance and Sustainability, and ClientEarth with
support by the Green Finance & Development
Center at FISF Fudan University, as part of a
project funded by UK PACT.
The comparison nds that both frameworks
are highly compatible and provide nancial
institutions, developers, relevant authorities in
China and in the BRI countries with important
tools to accelerate green nance and reduce
environmental risks. Both frameworks were
developed through international consultation.
The Green Development Guidance was
ocially launched by the BRI International
Green Development Coalition (BRIGC) in
2019. GDG proposed “1 project classication
mechanism” and “9 recommendations” (the
“1+9” recommendations) to accelerate the green
development of BRI and reduce the potential
adverse impact of BRI projects. Focusing on the
impact of projects on environmental pollution,
biodiversity conservation and climate change,
the study has made a preliminary positive and
negative list of projects, provided application
manuals for enterprises and nancial institutions
as well as a green development guide for the
railway and highway infrastructure sectors, and
provided green solutions for BRI participating
countries and projects. The research outcomes
have underpinned new government-issued
guidelines on overseas nance and cooperation.1
1 Including the Green Development Guidelines for Overseas
Investment and Cooperation jointly issued by MOFCOM
and MEE in July 2021, and the Guidance for Ecological
and Environmental Protection of Foreign Investment Co-
operation and Construction Projects jointly issued by MEE
and MOFCOM in January 2022.
5
The Green Investment Principles is an industry-led
initiative with 41 signatories and 13 supporting
institutes (by December 2021) committing to
strengthening green and low-carbon investments
in BRI countries and regions, who provide
voluntary reporting on implementation for their
operations and investments along the Belt and
Road. It is supported and implemented through
a secretariat and member-led working groups.
These working groups have developed free tools
and products for environmental and climate risk
assessment, environmental information disclosure
and green financial product innovation. An initial
green project database has also been developed
by the GIP Secretariat to provide access to more
investment opportunities along the Belt and Road.
For the further alignment and implementation of
both initiatives, the following recommendations
are made, including: further deepen information
sharing with partners to make relevant resources
more widely available; enhance communication
among environmental regulators, financial
regulators and financial institutions; carry out
specific cooperation on the definition of green/
brown assets, project environmental risk
assessment, industry guidelines, green project
database, etc.; jointly develop more practical
information disclosure and public participation
tools; also, capacity building with financial
institutions and project developers, as well as with
relevant authorities in BRI countries should be
facilitated to share experiences in environmental
risk management and accelerate green finance.
A wind farm in Vietnam. ©ALAMY
6
the BRIGC has developed and issued the
Green Development Guidance for BRI
Projects Baseline Study (GDG)2 with 9
recommendations and 1 green light system in
December 2020;
In October 2021, the BRIGC released the
Application Guide for Enterprises and
Financial Institutions3 and Guide for Railways
and Highways Infrastructure Sectors4 for the
GDG.
The GIP was launched as a voluntary set of
principles to accelerate green investments in
the BRI region by the Green Finance Committee
of China Society for Finance and Banking and
the City of London’s Green Finance Initiative in
London at the 3rd meeting of the UK-China Green
Finance Taskforce in November 2018. 7 principles
in total are included in GIP. By December 2021, the
GIP had 41 signatories and 13 supporters from
15 countries and regions around the world.It
had also opened its rst local chapter in Astana,
Kazakhstan in 2021.
This note provides a short comparative
assessment of the two frameworks, as well as
develops suggestions for the further alignment
and consistent implementation of the two
frameworks. It nds that both frameworks are
complementary and mostly harmonized. Both
frameworks—the GIP and the GDG—share a
similar objective: to drive greening nance and
investment in the BRI. The GIP addresses nancial
institutions for voluntary engagement in green
nance and risk management, while the GDG
addresses (1) nancial institutions, (2) developers/
enterprises and (3) regulators by providing
more detailed project evaluation, nancing and
management guidance based on China’s and
international best practices. Both frameworks are
in need of further improvement and development,
but overall are aligned in providing relevant tools
for greening nance in the Belt and Road Initiative.
2 http://en.brigc.net/Reports/research_subject/202011/
t20201125_102839.html
3 http://en.brigc.net/Reports/Report_Down-
load/2021/202110/P020211025599678005345.pdf
4 http://en.brigc.net/Reports/Report_Down-
load/2021/202110/P020211025599530110826.pdf
Introduction: The Green
Development Guidance and
Green Investment Principles
for the Belt and Road
Initiative
Promoting post-pandemic green recovery
and low-carbon sustainable development
has become an international consensus,
with concerted actions. However, in
the process of green and low-carbon
transition, insucient green investment
and nancing is a challenge faced by
most countries. Scaling green nance
and investments in the countries of the
Belt and Road Initiative (BRI) requires
collective eorts from stakeholders such
as government departments, nancial
institutions and enterprises to promote green
standards, principles and best practices. Over
the past years, relevant Chinese regulators have
provided numerous policy documents guiding
nancial institutions and enterprises to green
their BRI engagement. In addition to regulators,
also associations and individual nancial
institutions have established both public and non-
public frameworks on greening their investments
in the region.
Two organizations working on greening nance
have been explicitly mentioned by China’s
President Xi at the Boao Forum for Asia Annual
Conference in April 2021 and in the Initiative
for Green BRI Partnership signed by 29 country
representatives in June 2021: the BRI International
Green Development Coalition (BRIGC) and the
Green Investment Principles (GIP).
The BRIGC was established at the Second Belt
and Road Forum for International Cooperation
in 2019 with its secretariat in the Foreign
Environmental Cooperation Center, Ministry of
Ecology and Environment (MEE). BRIGC aims to
establish a policy dialogue and communication
platform, an environmental knowledge and
information platform, and a green technology
exchange and transfer platform, so as to advance
global consensus, understanding, cooperation,
and action of a green BRI. To green nance and
investments in the BRI,
7
Comparative assessment of
the GDG and the GIP
Overview of the GDG and the GIP
The Green Development Guidance and the
Green Investment Principles share a similar
goal of greening nance and investments
in the BRI. The following Table 1 provides an
overview of the two frameworks.
Table 1. Comparison of Green Development Guidance (GDG) and Green Investment
Principles (GIP) for greening nance in the Belt and Road Initiative (BRI)
Green Development Guidance (GDG) Green Investment Principles (GIP)
Issuer BRI International Green Development Coalition (BRIGC) Green Finance Committee of China Society for Finance
and Banking, the City of London’s Green Finance
Initiative (now UK-China Green Finance Center)
Supporters/
Institutions of
the Advisors
Foreign Environmental Cooperation Center, Ministry of
Ecology and Environment (MEE)
China Banking and Insurance Regulatory Commission
(CBIRC)
BRI Construction Promotion Center, National
Development and Reform Commission (NDRC)
World Resources Institute (WRI)
Children Investment Fund Foundation (CIFF)
ClientEarth
Habib Bank Limited, Pakistan
Asian Infrastructure and Investment Bank (AIIB)
World Wildlife Fund (WWF)
People’s Bank of China (PBOC)
UK Treasury
Belt and Road Bankers’ Roundtable (BRBR)
Principles for Responsible Investment (PRI)
World Economic Forum (WEF)
International Finance Corporation (IFC)
Paulson Institute
Target
Group(s)
Financial institutions
Project developers/enterprises
Relevant Chinese regulators
Relevant host-country regulators
Financial institutions
Large corporates investing in the region
Target activity Project nance and investment
Whole lifecycle eco-environmental and climate
management
Finance and investment
Content 1 Green Light System for environmental evaluation
(biodiversity, climate, pollution) of projects and
classication in “green”(encouraged projects),
“yellow”(environmentally neutral projects with moderate
impacts), “red”(projects requiring stricter supervision
and regulation) with extended project list, and proposed
the positive and negative lists of projects.
9 recommendations
1. Address all project phases for green overseas
practices
2. Provide exclusion list for environmental protection
3. Environmental impact assessment (EIA)
requirements specications
4. Dierentiated conditions (nance, approval)
stipulations
5. Environmental and Social Management System
(ESMS) stipulations
6. Grievance redress mechanism
7. Covenants
8. Public environmental reporting
9. International cooperation
7 principles
1. Embedding sustainability into corporate governance
2. Understanding environmental, social and
governance (ESG) risks
3. Disclosing environmental information
4. Enhancing communication with stakeholders
5. Utilizing green nancial instruments
6. Adopting green supply chain management
7. Building capacity through collective action
8
Level of detail Detailed description of project classication
Detailed description of project phases
Detailed implementation guide for nancial institutions
Detailed implementation guide for developers
Sector guidances/green solutions
High level principles
Active
Signatories
n/a 41 signatories and 13 supporters
State of
application
(January 2022)
The Green Overseas Investment and Cooperation
Guidelines (July 2021) issued by Ministry of Commerce
(MOFCOM) and MEE, as well as the Guidelines for
Ecological Environmental Protection of Foreign
Investment and Cooperation (January 2022) issued
by MEE and MOFCOM are congruent with many of the
recommendations of the Green Development Guidance;
29 senior government representatives recognized the
work of the BRIGC by signing on to the Initiative for Belt
and Road Partnership on Green Development in June
2021;
More than 5 working meetings and capacity building
activities with nancial institutions and regulatory
stakeholders;
Implementation Guide for Green Development Guidance
for nancial institutions and project developers
published by BRIGC in October 2021;
Sector Guidelines for transportation infrastructure
industry issued by BRIGC in October 2021.
Under implementation;
Created three working groups and a Secretariat with two
oces (Beijing and London);
Hosted series of capacity building activities;
Developed tools and methods for environmental risk
assessment (ERA) and green project database;
Developed website for information and access to
practical tools and reports;
Launched one regional chapter in Kazakhstan for
Central Asia (planning for more in the next few years);
Published 2 annual reports and held annual meetings.
Further
development
Providing sector-specic guidances, particularly for
high-risk and for green-opportunity sectors;
Constantly improve taxonomy and include new projects
in the “green”, “yellow”, “red” and “excluded” categories;
Further specications and strengthening of legal, non-
legal requirements and guidances;
Further work on capacity building activities with
local and BRI regulators, nancial institutions and
corporations;
Pilot activities with major BRI country;
Create awareness among policymakers and nancial
partners across the world.
Further work on incentivizing membership and building
capacity;
Creating more regional chapters;
Developing more tools and methods for ERA and green
investments;
Improving the existing green project database;
Exploring possibility of creating or promoting regional
green standards, such as the China-EU Common Ground
Taxonomy on green and sustainable nance;
Updating the Principles in accordance with the new
international trends.
9
Similarities and Overlaps of the two
frameworks
As both frameworks address nancial sector and
to some extent project developers/enterprises,
major similarities and overlaps between the two
frameworks can be identied:
Focus on green and sustainable nancing and
investment in the BRI
Focus on environmental and climate risks
GIP Principle 2: Understanding environmental,
social and governance (ESG) risks
• GDG Recommendation 3: Environmental
impact assessment
• GDG Recommendation 5: Environmental and
Social Risk Management System (ESMS)
Environmental information disclosure
• GIP Principle 3: Disclosing environmental
information
• GDG Recommendation 8: Public
environmental reporting
Integration of stakeholders in project
development and (partly) in implementation
• GIP Principle 4: Institute stakeholder
information sharing mechanism and
conict resolution mechanism to enhance
communication
• GDG Recommendation 3: Public participation
in environmental impact assessment
• GDG Recommendation 6: Grievance redress
mechanism
Complementarity of the two
frameworks
While many overlaps exist between the
frameworks, some elements of the frameworks
focus on dierent approaches, and can be seen as
complimentary (see also Table 2):
1. The frameworks encourage the integration of
green nance on both an organization level (GIP
Principle 1) and on a project timeline level (GDG
Recommendation 1):
• GIP Principle 1 encourages to incorporate
sustainability into the overall corporate
governance of the nancial institutions, and
thus to address sustainability (environment,
social) from a board’s perspective throughout
the whole company.
• GDG Recommendation 1 stipulates that
green project nance requires to address all
project phases – from initiation to evaluation,
from construction to operation and reporting
(and decommissioning).
2. The frameworks encourage accelerating
green nance utilization, yet on dierent
aspects:
• GIP Principle 5 encourages the use of
green nancial instruments, including green
insurance, green funds, green bonds.
• GDG Recommendation 4 stipulates the
acceleration of green nance by providing
better nancing and approval conditions for
green projects.
3. The GIP encourages the adoption of green
supply chain management (Principle 6).
4. The GIP encourages capacity building
(Principle 7).
5. The GDG stipulates the application
of covenants to ensure the power of
nancial institutions over projects to
apply environmental risk management
(Recommendation 7).
6. The GDG provides clear evaluation criteria
for “green”, “yellow” and “red” projects.
7. The GDG provides a list of projects falling
into the dierent categories according to its
environmental impacts.
8. The GDG provides a list of tools and
safeguards to help nancial institutions
and enterprises to improve environmental
outcomes of projects through better project
management.
10
Table 2. Dierent Approaches of the GDG and the GIP
Phase Specication GDG GIP
Core of all activities Sustainability as part of corporate governance GIP 1
Green project management along whole project
lifecycle
GDG 1
Project evaluation Exclusion of projects for environmental reasons GDG 2
Classication of project’s environmental
performance
Green Light System
Evaluation of project’s environmental and climate
impact, including stakeholder consultation
GDG 3 GIP 4
Financing Preference for green nance GDG 4 (stipulating better
conditions for green
projects)
GIP 5
Operation Environmental and social risk management GDG 5
Grievance mechanism GDG 6 GIP 4
Covenants GDG 7
Reporting Reporting of environmental performance GDG 8 GIP 3
Supply chain
management
Supply chain management GIP 6
Cooperation International cooperation GDG 9
Capacity building GIP 7
11
Implementation of the GDG
and the GIP
Implementation of the Green
Development Guidance
The GDG provides both a relevant
framework for evaluating the
environmental (and climate) contribution
and environmental (and climate) risks
of projects, for project management
and guidance for reporting with a focus
on Chinese-led investments that are
encouraged to include international
nancial and development partners. The
GDG provides guidance for Chinese and
international partners engaged in nancing
overseas projects in BRI countries.
Accordingly, some parts of the GDG should be
applied by Chinese and international partners,
such as regulators, nancial institutions and
corporations (e.g. on project categorization,
grievance, covenants, reporting). Furthermore,
the GDG also provides a conceptual framework
to include relevant Chinese regulators to guide,
approve and oversee greening of the BRI, where
National Development and Reform Commission
(NDRC), Ministry of Commerce (MOFCOM), State-
owned Assets Supervision and Administration
Commission of the State Council (SASAC), and
State Administration of Foreign Exchange (SAFE)
will play dierent roles to jointly ensure the
development of BRI projects. Currently, MOFCOM
and MEE provided an updated environmental
guidelines for overseas investments in July 2021,
and has further updated its 2013 green overseas
investment guidance in January 2022. Both
documents put forward higher requirements for
the prevention of ecological and environmental
risks and environmental standards for overseas
projects.
Furthermore, the GDG issued an implementation
guide for project developers and nancial
institutions in October 2021, as well as a sector
guidance for transport infrastructure investments.
Based on practical needs, the application manual
provides operation guidelines and application
tools for enterprises, nancial institutions
and other stakeholders involved in the BRI
development to implement the recommendations
of the GDG and carry out project classication
and management. It also designs and proposes an
action roadmap for accelerating the development
of green projects and phase out red projects in line
with the 9 recommendations.
In order to further implement the GDG with its 9
recommendations and the trac light system in a
holistic way, competent ministries and authorities
could support by considering the following steps:
Extend and apply project categorization and
taxonomy including concept and adaptation
(e.g. authorities for commerce cooperation,
environmental management and nancial
regulatory); for international cooperation
projects, this taxonomy can be harmonized with
the harmonized China-EU Common Ground
Taxonomy.
Ensure project self-evaluation by project
initiator is correct (e.g. authorities for
commerce cooperation and environmental
management) in order to minimize “green-
washing” of projects and hold project owners
accountable.
Ensure EIA is sucient (e.g. authorities for
environmental management) according
to the Green Overseas Investment and
Cooperation Guidelines and Guidance for
Ecological and Environmental Protection
of Foreign Investment Cooperation and
Construction Projects (i.e. stricter EIA
requirements in countries with weaker
institutional environments and for high-risk
projects; encourage enterprises to carry out
environmental impact assessments and due
diligence on foreign investment projects in
accordance with internationally accepted
standards).
Provide preferential conditions for “green”,
and “red-green” projects (e.g. authorities for
nance, export credit, and nancial regulatory,
nancial institutions).
Ensure reporting of Chinese nancial
institutions include environmental reporting
(e.g. authorities for nancial regulatory) -
international nancial institutions often comply
with international standards, such as TCFD,
Equator Principles.
Develop practical guidances and handbooks
for nancial institutions and project developers
on how to conduct eective environmental
information disclosure and public participation.
12
The conceptual process for the implementation of
the GDG with the relevant authorities is drafted in
Figure 2. This process can include both Chinese
and international nancial institutions and project
developers, particularly for larger overseas
investments.
Implementation of the Green
Investment Principles
The implementation of the GIP by signatories is
facilitated by capacity building and tracked by the
annual progress report of the GIP Secretariat. The
high-level nature of the principles provides certain
exibility in implementation, allowing nancial
institutions to freely adopt common standards,
whether those are international or national,
mandatory or voluntary, in dierent institutional
contexts. It is further supplemented with tools and
casebooks developed by the member-led working
groups that consolidate existing methodologies
and practices.
The annual progress reporting, mandated by the
governance structure, is led by the GIP Secretariat,
during which a detailed survey will be distributed
to all members, covering the four themes of
GIP implementation: governance and strategy,
risk assessment and management, corporate
and investment footprint, and disclosure
and engagement. Questions summarizing
common practices of nancial institutions
are grouped under dierent subthemes and
themes, where members can choose the extent
of implementation and further elaborate with
supplemental materials. The evaluation for
each member institution is thus based on their
quantitative and qualitative answers: the more
comprehensive and explicit their sustainability-
related mechanisms and processes are, the higher
they will be scored.
Figure 1. Evaluation process according to the Implementation Guide for the Green
Development Guidance
13
Figure 2. Potential decision-making process for Green Development Guidance
implementation (project approval)
BRI investment project
Apply strict environmental impact
assessment (EIA) according to
international best practices
Yes
Apply environmental impact
assessment (EIA) according to
national laws
Does the project cause no significant
environmental harm in any aspect and
positively contributes to at least one
environmental aspect?
Is green category?
Fast track
No
Yes
Yes
Authorities for commerce
cooperation,
environmental
management and
financial regulatory
Authorities for state assets
management, commerce cooperation,
and economic planning
Prepare relevant documents for
further approval
Slow track
No
Prepare due diligence for financial
institution(s)
Yes
Is bankable?
Negotiate financial terms including
insurance terms
Yes
Is green category?
Improved financial terms
Yes
Market or below-market
financial terms
No
Yes
Project needs re-
evaluation
No
Financial Institution/
Export credit agency
Authorities for
financial
regulatory and
finance
Project Implementation Phase
Legend
Responsible
regulator
Decision
Action
Project correctly
No
No
No
Yes
Project self-
assessment: Is
project green?
Meets requirements
on legal risks,
financial feasibility
etc.?
14
The annual report maps out the overall landscape
of how member institutions are performing in
terms of these subthemes and identies progress
made compared to the previous year, as well as
challenges to be tackled in the coming years. The
2021 report5 shows improvements compared to
the performance of the previous year. Signatories
are gradually moving towards more advanced
stages of performance:
Governance and strategy: signatories have
made major progress as increasing numbers
of banks are building up structures and
procedures for the oversight of climate and
environment related issues at board and senior
management level, while demonstrating higher
levels of climate ambitions with regards to coal
divestment and carbon neutrality.
Climate and Environmental Risk Assessment:
signatories have also made progress on
risk assessment, and to some extent risk
management, with expanding scope of risks
assessed, increasing presence of quantitative
elements, and more frequent internal
communication. Environmental Risk Analysis
(ERA) has gained more popularity among
members in the forms of scenario analysis and
stress testing on the sectoral level.
Investment and Corporate Footprint: green
investments and green nancing are picking
up pace, while members are becoming
increasingly stringent on their nancial support
for carbon-intensive sectors. Near three
quarters of signatories have considered the
feasibility of at least limiting, halting, or exiting
from investments in high emission projects.
Disclosure and Engagement: Signatories
are showing positive signs as the scope
of climate-related disclosure continues to
expand and deepen, while sustainability issues
are increasingly becoming an element of
stakeholder engagement.
5 https://gipbr.net /upload/le/20210921/63767817153450
35704389754.pdf
On top of the annual report, a medium-term
strategic planning, “Vision 2023” was endorsed
by all GIP members in 2020, which sets out
expectations for the whole GIP community in ve
directions: assess, disclose, commit, invest, and
grow. 12 specic Key Performance Indicators
(KPIs) are put forward as yearly targets to measure
progress, among which 8 applies to individual
nancial institutions and the other 4 applies to
the whole GIP community. Targets are set for 7
of the individual performance indicators for the
year 2020, with four of them met and the other
three closely lining up with what was expected.
Signicant ones include that 50% of the signatory
institutions are developing policies on coal/fossil
fuel divestment and increasing ambition of existing
commitments towards total phase-out; and that
58% are setting quantitative green investment
targets in terms of volume or proportion.
Figure 3. Figure 3. Themes and Sub-
themes for Performance Evaluation from
the GIP annual report
Corporate and Investment
Footprint
Green Asset
Carbon-intensive Asset
Corporate Footprint
Governance and strategy
Governance and
strategy
Portfolio Shift
Risk Assessment and
Management
Risk Assessment
Risk Management
Supply Chain
Disclosure and
Engagement
Disclosure Governance
and Strategy
Disclosure: Risk
Disclosure: Footprint
Engagement
15
Recommendations for
Collaboration between the
GDG and the GIP
To further enhance the green development
of the BRI, the GIP and the GDG will
continue to be highly complementary
frameworks. To foster alignment,
harmonization and collaboration between
the two frameworks and the involved
partners, the GIP and GDG envisage to
strengthen collaboration in the following
areas:
1. Enhance communication between secretariat
of the two initiatives, including possibility of
co-hosting events (seminars, capacity building),
co-author reports, etc.; further deepen
information sharing within partners to make
relevant resources more widely available;
2. Consider collaboration on the development
of a unied denition or scope of brown assets
or economic activities, e.g. based on the red
pillar proposed by the GDG, for implementation
by stakeholders in the BRI;
3. Consider collaboration on the development
of a unied reporting standard for
environmental risks and performance of
projects;
4. Consider collaboration on dening
environmental impact assessment standards
for projects implemented in non-designated
countries;
5. Consider collaboration on the development
of some practical tools for free access, e.g.
climate and environmental risk screening tools,
information disclosure and public engagement
tools;
6. Strengthen information exchange and
sharing between environmental regulators and
nancial regulators & institutions;
7. Consider collaboration on Green Projects
Pool & Database;
8. Consider jointly implement some case
studies on the application of GDG and GIP,
combine with the BRIGC demonstration
projects, to select some specic projects and
provide ecological and environmental risk
assessment and green solutions. Afterwards,
analyze the economic and environmental
benets before and after the application of
green solutions, which will provide reference
for the application to other BRI participating
countries;
9. Consider inviting the BRIGC or its partners as
supporters to the GIP;
10. Consider inviting GIP members as
supporters to the GDG;
11. Consider any other areas that could
enhance the role of both GIP and GDG in the
development of a green BRI.
GIP
GIP
Green
Investment
Principles
Green
Investment
Principles
GIP
Green
Investment
Principles
GIP
Green
Investment
Principles
北京绿色金融与可持续发展研究院
SUPPORTED BY
Alignment and Implementation of the Green
Development Guidance for BRI Projects
(GDG) and the Green Investment Principles
for the Belt and Road (GIP)
Accelerating
Green BRI
Investments
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