11 May 2018

The use of sustainable procurement would help ensure BRI investments support countries in achieving low-carbon sustainable development.

Authors

Alison Hoare

Alison Hoare

Senior Research Fellow, Energy, Environment and Resources

Lan Hong

Deputy Director, Eco-Finance Research Center; Professor, Environment School and Finance School, Renmin University of China

Jens Hein

Policy Adviser, International Affairs Section, Royal Society

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The Golden Bridge of the Silk Road sculpture built at Chang’an Street, Beijing, to celebrate National Day in 2016. Photo: VCG/VCG via Getty Images.
The Golden Bridge of the Silk Road sculpture built at Chang’an Street, Beijing, to celebrate National Day in 2016. Photo: VCG/VCG via Getty Images.

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Summary

  • China is seeking to increase its overseas investments in infrastructure projects, and the Belt and Road Initiative (BRI) is its strategic vehicle to help achieve this. The initiative aims to improve connectivity between China and the world by encouraging investment in transport, energy and communications infrastructure.
  • In light of the profound impacts of infrastructure on societies and the environment, the BRI will be crucial in determining whether countries are able to achieve more sustainable development patterns, and whether global emissions can be aligned with a 2°C pathway. One of the intended outcomes of the BRI is that it will help achieve sustainable development in partner countries, but this will depend on the nature of the investment projects.
  • The use of sustainable procurement for infrastructure projects is a potentially valuable tool to reduce environmental risks for investors as well as to help drive best practice and innovation in sustainable design, construction and operation.
  • Sustainable procurement refers to public procurement (including the purchase of infrastructure projects by governments) and to the procurement of goods and services within projects (supply-chain management) in which social and environmental issues are integrated into the decision-making process.
  • Experience with sustainable procurement is growing at the international level, and the multilateral development banks and European development finance institutions are increasingly encouraging its use. This is being achieved through their investment strategies and environmental safeguards and procurement policies, as well as through the provision of capacity-building for their borrowers.
  • There is a high level of interest among China’s policy banks in increasing the sustainability of their investments, including through encouraging borrowers to implement sustainable procurement in their supply chains. However, awareness of sustainable public procurement and of the potential role of investors in encouraging its use remains limited.
  • There are opportunities to strengthen the use of sustainable procurement for China’s policy banks and government as well as for international stakeholders in the BRI. This would make a significant contribution towards ensuring that BRI investments support countries in achieving low-carbon sustainable development.

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