Most western financial institutions use environmental, social and corporate governance (ESG) criteria to evaluate and report on (part of) their activities. The BRI International Green Development Coalition, which involves both Chinese and international actors, published a report that proposes a system to categorise Chinese overseas investments based on their polluting, climate and biodiversity impacts. In this classification system investments in, for instance, hydropower plants or windmills are marked green and thus favoured over coal-fired power plants (marked red). This classification system might be able to influence the decision-making processes of BRI projects and make these more sustainable. Yet, the current adverse economic circumstances pose a considerable challenge to financial institutions when it comes to making considerations of sustainability a guiding element in BRI projects [Advisors propose new system to regulate China’s overseas investments].
A geopolitically overcrowded Black Sea region provides little incentive for Chinese companies to invest in the region. Yet, this region is attractive for China because of its proximity to the EU and from an energy perspective. The recent conflict between Azerbaijan and Armenia has harmed stability in that region, which halted BRI-related investment decisions related for now. Also, Russia can answer the need for China’s energy consumption with natural resources in Siberia. Caucasian countries who welcome BRI investments must decide to either walk a delicate geopolitical tightrope or to burn bridges, for example with regard to their relations with the United States. The change of administration in the U.S. might lead to an increase in American attention for that region [The Limits of China’s Involvement in South Caucasus].
Ali Çikmazkara
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