The Green Investment Principles (GIP) for the Belt and Road held its first steering committee meeting via video conference in early April this year. Co-chaired by Dr. Ma Jun, Chairman of the China Green Finance Committee, and Sir Roger Gifford, Chairman of the Green Finance Institute at the City of London, this meeting convened senior representatives from the UK Treasury and the People’s Bank of China with the GIP’s steering committee members. The GIP working group leaders were also invited to observe.
The GIP is a set of voluntary principles to promote green investment and sustainability in the Belt and Road region. Since its launch in November 2018, the GIP has received strong support from the global financial community. By the end of March 2020, 37 global institutions from 14 countries officially committed to adhere to the principles including large financial institutions like Industrial and Commercial Bank of China and Standard Chartered. GIP also received official support from PwC, Ernst & Young, and nine other third-party service providers and non-profits.
The meeting’s purpose was three-fold. The first objective was to provide a progress update on GIP implementation to the steering committee. Also on the agenda was the discussion of GIP governance arrangements and the GIP mid-term strategy.
Over the last year, the GIP Secretariat’s implementation of the principles progressed well. The three working groups of the Secretariat—climate and environmental risk assessment, climate and environmental information disclosure, and green financial product innovation—were established in August 2019 to take stock of best practices and develop applicable tools and solutions including a risk assessment toolbox, promoting environmental/climate information disclosure for GIP signatories, and planning capacity-building activities of innovative green finance instruments. The Secretariat is also leading a research project on green supply chains and the construction of a green project database for projects on the Belt and Road, which are both expected to be released later this year.
As the GIP continues to grow and mature, the sustainability and effectiveness of the initiative is a priority for the steering committee and the GIP Secretariat. The steering committee advised that the GIP Secretariat must develop a robust governance structure to cultivate strong engagement of GIP signatories, track and visualize green financial flows of the Belt and Road region in its first annual report, engage with other international initiatives for alignment and synergies, and work with recipient countries in the region for their support to provide some enforcement and accountability for the GIP.
In shaping a future roadmap for the finance-first initiative to green the Belt and Road region, the steering committee and the GIP Secretariat also discussed a mid-term strategy for 2023. The strategy is critical guidance for the GIP to demonstrate a credible track record of success to fulfill its mission and also contribute to the goals of the United Nations 2030 Agenda for Sustainable Development and the Paris Agreement as it turns five in 2023.
The Paulson Institute is a founding member and a member of the steering committee of the GIP. Gracie Sun, Senior Advisor and Managing Director of the Green Finance Center, represented the Paulson Institute at the first steering committee meeting. Since 2018, we have participated in drafting the principles, assisting the working group to develop tools for environmental/climate risk assessment, and supporting green project data development. In the future, we will continue our efforts to support GIP implementation, and to promote environmental friendliness and the inculcation of climate resilience into new infrastructure investment projects in the Belt and Road region. A green Belt and Road is indeed an imperative for the future.