Shaping Sustainable Finance? European Engagement With the Asian Infrastructure Investment Bank's Energy Strategy

ABSTRACT The Asian Infrastructure Investment Bank (AIIB), a Regional Development Bank established in 2015 and promoted by China, aims to support sustainable economic development in Asia through infrastructure investments. Surprisingly, a considerable number of European countries joined as founding members despite the Bank's initial focus being strictly regional. Their primary goals were not only to increase financial flows towards Asian infrastructure but also to ensure that the AIIB adhered to internationally recognised financial, environmental and social standards. This paper analyses the European states’ ability to impact specific institutional policies concerning the energy sector. It unpacks the Bank's decision‐making processes by analysing statements made at the Board of Governors level through a qualitative discourse analysis methodology and triangulating results with the analysis of Annual Reports, official documents approved by the AIIB and its operations. The analysis revealed that the primary influence of European countries can be found in the alignment of the AIIB Energy Sector Strategy with the Paris Agreement and its increase in green finance. However, the resistance of certain developing countries and members of the Bank also led to an ambiguous approach of the AIIB towards sustainable finance.