The City of London Corporation‘s Green Finance Initiative (GFI), in partnership with China’s Green Finance Committee (GFC), announced today that 28 firms from around the world have signed up to a set of green finance guidelines for the Belt and Road Initiative (BRI).

Building on existing responsible finance initiatives, the Green Investment Principles aim to incorporate low-carbon and sustainable development into projects in Belt and Road countries, which represent approximately 40% of the earth’s total land area and 55% of total CO2 emissions. UK headquartered bank Standard Chartered was the first to sign up to the voluntary code of conduct.

The announcement was made at an event held in the Chinese capital, Beijing, on the sidelines of this year’s Belt and Road Forum. Key speakers included City Corporation Policy Chair Catherine McGuinness and Chairman of the Green Finance Committee Dr Ma Jun.

The principles, a project first proposed in the 9th UK-China Economic and Financial Dialogue, were drafted by a number of organisations including the World Economic Forum, UNPRI, Belt & Road Bankers Roundtable and the Paulson Institute.

First published in London by the GFI and GFC late last year, the principles are supported financially by the UK government through the China-UK PACT programme (Partnering for Accelerated Climate Transitions). This funding aims to bolster robust implementation and governance of the principles, and support signatories to share their knowledge and collectively raise their ambition over time, drawing on the UK’s green finance expertise and leadership.

City of London Corporation Policy Chair Catherine McGuinness said:

“These principles are the start of a journey to green the Belt and Road, providing a framework for how firms and organisations can incorporate low-carbon and sustainable development into BRI projects. I’m delighted to see so many firms sign up to the guidelines, and hope many others will decide to come on board.

“While there is some way to go to ensuring the Belt and Road is truly green, today’s announcement is another step in the right direction, and a powerful statement of intent from financial firms in China, the UK and across the world.

“I look forward to conversations going forward on how the UK can work with our Chinese and international partners to ensure the ‘project of the century’ is sustainable and environmentally friendly, and to seeing these principles evolve over time.”

Dr Ma Jun, Chairman of China Green Finance Committee said:

“The majority of global infrastructure investment in the coming decades will be in the Belt and Road region and they will have a significant impact on the implementation of the Paris Agreement and UN Sustainable Development Goals.

“The aim of the GIP is to ensure that environmental friendliness, climate resilience, and social inclusiveness are built into new investment projects in the Belt and Road.

The GIP has already received strong support from many global financial institutions, and we expect more lenders, investors and nonfinancial corporates to sign up to it.”

Bill Winters CBE, CEO at Standard Chartered said:

“We have been supporting our clients in managing their environmental and social risks for decades.

“We are committed to working with all parties to implement the Green Investment Principles and contribute to commerce and prosperity across the Belt and Road markets”

More details of the Principles are expected to be announced later this year at the City of London Corporation’s Green Finance Summit.

The Summit will see the launch of the new Green Finance Institute, a collaboration between the City of London, environmental finance specialists and UK Government which will provide global leadership on the future of green finance.

The development follows the creation of a UK-China Green Finance Centre last year to lead on much of the work of the long-established UK-China Green Finance Taskforce outlined at the UK-China Economic and Financial Dialogue in December 2017.

The last meeting of the UK-China Green Finance Taskforce took place in London in November 2018, where a progress report and recommendations were produced.

London is rated as the top global financial hub for the quality of its green finance offering in the latest Green Global Finance Index, published by Long Finance in March 2019.

Notes to editors

The City of London Corporation is the governing body of the Square Mile dedicated to a vibrant and thriving City, supporting a diverse and sustainable London within a globally-successful UK. www.cityoflondon.gov.uk

UK PACT is part of wider UK Government spending on International Climate Finance. As part of the Paris agreement, the UK has committed with other countries to mobilise $100bn of climate finance a year by 2020. The UK has committed £5.8bn International Climate Finance for 2016-2021, and of this, £60m has been allocated to UK PACT.

For more information contact:

Nathan Rodgers

Financial Services Media Officer, City of London Corporation

Tel: 44 (0) 7864 625086

Email: Nathan.rodgers@cityoflondon.gov.uk

List of GIP Signatory Institutions (in alphabetical order)

1. Agricultural Bank of China

2. Agricultural Development Bank of China

3. Al Hilal Bank

4. Astana International Exchange (AIX)

5. Bank of China

6. Bank of East Asia

7. China Construction Bank

8. China Development Bank

9. China International Capital Corporation (CICC)

10. China International Contractors Association (CHINCA)

11. Credit Agricole-CIB

12. DBS Bank

13. Deutsche Bank

14. Export-Import Bank of China

15. First Abu Dhabi Bank (FAB)

16. Habib Bank (HBL)

17. Hong Kong Exchanges and Clearing Limited (HKEX)

18. HSBC

19. Khan Bank

20. Industrial and Commercial Bank of China (ICBC)

21. Industrial Bank

22. Luxemburg Stock Exchange

23. Mizuho Bank

24. Natixis Bank

25. Silk Road Fund

26. Standard Chartered Bank

27. Trade & Development Bank of Mongolia (TDB)

28. UBS

GREEN INVESTMENT PRINCIPLES FOR THE BELT AND ROAD

Principle 1: Embedding sustainability into corporate governance

We will embed sustainability into our corporate strategy and organisational culture. Our boards and senior management will exercise oversight of sustainability-related risks and opportunities, set up robust systems, designate competent personnel, and maintain acute awareness of potential impacts of our investments and operations on climate, environment and society in the B&R region.

Principle 2: Understanding Environmental, Social and Governance Risks

We will strive to better understand the environmental laws, regulations, and standards of the business sectors in which we operate as well as the cultural and social norms of our host countries. We will incorporate environmental, social and governance (ESG) risk factors into our decision making processes, conduct in-depth environmental and social due diligence, and develop risk mitigation and management plans, with the help of independent third-party service providers, when appropriate.

Principle 3: Disclosing environmental information

We will conduct analysis of the environmental impact of our investments and operations, which should cover energy consumption, greenhouse gas (GHG) emissions, pollutants discharge, water use and deforestation, and explore ways to conduct environmental stress test of investment decisions. We will continually improve our environmental/ climate information disclosure and do our best to practice the recommendations of the Task Force on climate-related Financial Disclosure.

Principle 4: Enhancing communication with stakeholders

We will institute stakeholder information sharing mechanism to improve communication with stakeholders, such as government departments, environmental protection organizations, the media, affected communities and civil society organizations, and set up conflict resolution mechanism to resolve disputes with communities, suppliers and clients in a timely and appropriate manner.

Principle 5: Utilizing green financial instruments

We will more actively utilize green financial instruments, such as green bonds, green asset backed securities (ABS), Yield Co, emission rights based financing, and green investment funds, in financing green projects. We will also actively explore the utilisation of green insurance, such as environmental liability insurance and catastrophe insurance, to mitigate environmental risks in our operations.

Principle 6: Adopting green supply chain management

We will integrate ESG factors into supply chain management and utilize international best practices such as life cycle accounting on GHG emissions and water use, supplier whitelists, performance indices, information disclosure and data sharing, in our investment, procurement and operations.

Principle 7: Building capacity through collective action

We will allocate funds and designate personnel to proactively work with multilateral organizations, research institutions, and think tanks to develop our organizational capacity in policy implementation, system design, instruments development and other areas covered in these principles.