AIIB warns climate inaction could downgrade a third of sovereign borrowers by 2050

The Asian Infrastructure Investment Bank (AIIB) has warned that if climate policy fails to strengthen, more than a third of its sovereign borrowers could face credit rating downgrades by 2050. The report, published on Monday, states that under a current policy scenario with unchanged climate rules and a projected 2.9 degrees Celsius rise in global temperatures, nearly 34% of the bank's sovereign portfolio would suffer downgrades.

However, this percentage drops to just over 11% under a Paris Agreement-aligned pathway that limits global warming to 1.5 degrees Celsius through swift policy intervention and aggressive decarbonisation. The AIIB emphasizes that infrastructure decisions made today will shape development pathways for decades and must support a more sustainable future, particularly for developing economies heavily reliant on nature-dependent sectors.

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