A comparative analysis of the environmental and social policies of the AIIB and World Bank

This paper presents a comparative analysis of the environmental and social policies of the Asian Infrastructure Investment Bank (AIIB) and the World Bank. Our objective is to assess how the AIIB innovates in the international financial order in terms of Environmental and Social Assessment (ESA) instruments. We analyse projects financed by the two institutions in India between 2017 and 2020, considering both institutions' social and environmental standards. First, we compare the social and environmental guidelines of both financial institutions extensively. Then, we analyse 20 projects carried out in India during this period, considering the amounts invested, risk classification policies, and the adopted ESA instruments. Finally, we conduct two case studies analysing each organization's ESA instruments based on 10 parameters of comparison. We conclude that the AIIB portrays itself as a ‘middle way’ bank, with the internalization of some standards of the already established multilateral development banks (MDBs), but with several innovative characteristics. We identify the incorporation of some World Bank guidelines used in ESA instruments in AIIB projects. Nevertheless, the AIIB innovates through its focus on infrastructure, the variability of its project sizes, more integration with the borrower's national policies and programmes, and the simplification of socio-environmental analysis instruments.