The Green Investment Principles (GIP) for the Belt and Road was officially launched in November 2018 as a collaborative initiative between the China Green Finance Committee and the City of London Corporation, along with international organizations such as the IFC, PRI, the World Economic Forum, and the Paulson Institute. The GIP aims to promote sustainable investment practices across the Belt and Road Initiative (BRI) by embedding environmental, social, and governance (ESG) considerations into the investment process.
The GIP focuses on seven core principles, including integrating sustainability into corporate governance, enhancing stakeholder communication, disclosing environmental information, utilizing green financial instruments, and adopting green supply chain management. These principles are designed to guide financial institutions and other stakeholders towards supporting green development while aligning with global sustainability frameworks such as the UN 2030 Agenda and the Paris Agreement.
As of December 2024, the GIP has expanded its membership to 49 global institutions across 17 countries, representing assets worth a total of $42 trillion. The GIP is committed to fostering collaborative efforts through regional chapters and working groups that focus on transition risks, climate disclosure, and innovative green financial products. By addressing these key challenges, the GIP aims to advance sustainable finance and support low-carbon transitions in the Belt and Road region.
Through its annual reporting mechanism, capacity-building efforts, and high-level engagements, the GIP continues to drive positive environmental and financial outcomes, positioning itself as a cornerstone of sustainable investment along the Belt and Road.
The GIP is a set of principles for greening investment in the Belt and Road. It includes seven principles at three levels, i.e. strategy, operations and innovation.
Principle 1 and Principle 2 are designed to encourage signatories to incorporate sustainability and ESG factors into corporate strategies and management systems, aiming to call for implementation starting from the highest level and throughout the whole organization whenever possible.
Principle 3 and Principle 4 focus on communication with stakeholders at the operational level. Specific measures that signatories could take to contain environmental and social risks include environmental risk analysis, information sharing and conflict resolution mechanism.
Principles 5 to 7 are set to encourage signatories to utilize cutting-edge green financial instruments and green supply chain practices, and to improve organizational capacity through knowledge sharing and collective actions.
Principle 1: Embedding sustainability into corporate governance
We will embed sustainability into our corporate strategy and organizational 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), YieldCo, emission rights-based financing, and green investment funds, in financing green projects. We will also actively explore the utilization 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.