Greening the Belt & Road: Taking the Green Investment Principles Seriously

China’s Belt and Road Initiative is now the world’s largest infrastructure initiative, with long-term climate change effects. Co-proposed by the Green Finance Committee (GFC) of China Society for Finance and Banking and City of London’s Green Finance Initiative (GFI) in November 2018, the GIPs include seven principles: (1) embedding sustainability into corporate governance; (2) understanding Environmental, Social and Governance Risks (ESG); (3) disclosing environmental information; (4) enhancing communication with stakeholders; (5) utilizing green financial instruments; (6) adopting green supply chain management; and (7) building capacity through collective action.

This presentation focuses on the question: what role does the green investment principles (GIPs) play in building a green Belt and Road and addressing relevant regulatory challenges?

The role that China plays in promoting a greener Belt and Road may not be acknowledged, or simply be dismissed as “window dressing” if the focus is on setting environmental standards through formal multilateral or bilateral agreements. Based on the theory of nodal governance, it is argued that the GIPs’ two-dimensional networks enable China to influence investment decisions over many Belt and Road Countries indirectly through fund providers as key nodes to transition towards green investment; China has avoided direct interference with the domestic policies of host countries through the GIP network. As a framework agreement, the GIPs also provide opportunities for signatories to contribute to the design and negotiation of specific implementation standards, enhanced capacity building, and the prospect for more stringent and prescriptive environmental standards in the future.

About the Speaker

Dr Wenting Cheng is Grand Challenge Research Fellow at the ANU Grand Challenge Project Zero Carbon Energy for the Asia-Pacific, based at the ANU College of Law. Wenting had a legal background in international economic law (LL.B) and intellectual property law (LL.M). Wenting worked at the Development and Research Centre of Chinese State Intellectual Property Office (SIPO) for 5 years. She undertook her PhD at the ANU School of Regulation and Governance (RegNet) from 2014 to 2018, working on China in global governance of intellectual property. In 2018, Wenting was Visiting Fellow at the ANU Centre for European Studies, working on the Jean Monnet Project Understanding Geographical Indications. Her current research at the Grand Challenge focuses on different legal and regulatory mechanisms to promote the green transition, including IP and international clean technology transfer, green finance, regional environmental goods negotiations and the EU’s carbon border adjustment mechanism.

This seminar is being delivered as part of the ANU China Seminar Series, which is supported by the Australian Centre on China in the World.

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