AIB has launched its Green Bond Framework, which the bank says will help it to increase the amount of eco-friendly lending it engages in.
The bank has committed to making €5 billion available in green lending over the next five years as it seeks to expand its low carbon-based business.
"This will allow us to have finance that is dedicated to supporting the decarbonisation of the economy," said Colin Hunt, CEO of AIB.
"We're characterising this as a 'dark green bond' in that we're being quite narrow in terms of the assets that would be financed using these funds.
"It would be very much focused on building up energy efficient, green commercial buildings, new energy efficient homes, wind farms, solar and biomass," the CEO said.
The bank plans to launch a range of products supported by green bonds in the coming months, though the pricing has not yet been set out by the bank.
Colin Hunt said that price was not the only focus of the products, however, as this was part of a broader discussion about the need for change.
"This is something that sits at the very heart of the ongoing existence of our way of life," he said. "This is not a fashionable choice that companies can choose to make, it's a must do.
"We've got to address this major, major issue; we've got to address it now and the funding that we're going to be raising is going to help us to support Irish businesses to moving to a low carbon future."
There will also be a need to ensure that the money loaned out is genuinely going towards more sustainable products and services.
"Any lending that we make is going to be specific to the asset, and in order to qualify for funding within the green space it's going to have to be a verifiable green lending opportunity," Mr Hunt said.
"We're also going to have an obligation to report on this," he added.
That will include setting out specific targets around the number of assets the bank will be supporting, the environmental impact of these projects and how much money it will be putting out into the economy, he said.
AIB is currently committing to offering €5 billion in green loans over the next five years. Based on the €12.1 billion of loans issued last year, that would represent just over 8% of the bank's new lending during that period.
However Mr Hunt said that was an important step - and he would be glad to see the figure go even higher than its current target.
"It's a very significant statement of intent," he said. "I certainly regard the €5 billion as a de minimis space and I would have an aspiration that we will get above that level.
"The simple truth is that AIB, as one of Ireland's pillar banks, has a special role to play in assisting the decarbonisation of the economy."
To that end he denied at this move was 'green-washing', or simply an attempt to profit from a growing consumer trend.
"We're putting sustainability at the heart of everything we do," he said. "This is not a new seem; this is not something that has just arisen in the past few months. We have been publishing sustainability reports in terms of our impact over the course of the past three years."
Two years ago the bank established a specialist team around environmental and climate issues, he said, while the bank also has a high Climate Disclosure Project rating and was continuing to reduce its emissions.
Elsewhere, the Irish Independent yesterday reported on changes to AIB's breakage fees following accusations that the bank was in breach of European rules that came into force in 2016.
Colin Hunt said issues like these are constantly kept under review and any necessary changes are made as quickly as possible by the bank.
"We keep these matters under constant review and we will always ensure that we are fully compliant with rules and regulations" he said. "We introduced the changes as soon as was practicable."
AIB said that it was always compliant with the relevant legislation.
In a statement it said it introduced "a revised approach" to fixed rate mortgage breakage fees in July, which is calculated using both "a retail based formula and a market interest rate based formula".
"Either formula may result in a lower calculation, and AIB applies the lowest of the two calculations to the customer," it said.
"This revised approach became available to both new and existing customers who exit from a fixed rate mortgage from July 15th," the statement added.
When asked if customers charged under the old regime would be entitled to refunds, Mr Hunt said the bank would be in touch with affected customers in the near future.