UAE banks lead sustainable financing, initiatives ahead of COP28

The banking sector is playing a crucial role in combating climate change by providing green financing and supporting climate initiatives

by Gulf Business

September 20, 2023

Image courtesy: manusapon kasosod / Getty Images

UAE national banks are advancing sustainable financing and climate initiatives, as part of the government’s broader strategy to promote sustainable economic growth ahead of the COP28 climate talks in Dubai later this year.

The financial services sector is playing a crucial role in combating climate change by providing green financing and supporting climate initiatives in the country, according to state news agency, WAM.

The banks’ initiatives include substantial investments in sustainable financing and support the transition to a green economy and renewable energy.

The UAE’s top six biggest banks – First Abu Dhabi Bank (FAB), Abu Dhabi Commercial Bank (ADCB), Emirates NBD, Dubai Islamic Bank (DIB), Mashreq, and Abu Dhabi Islamic Bank (ADIB) – allotted more than $51.8bn (Dhs190bn) in sustainable initiatives in 2022.

First Abu Dhabi Bank

FAB has committed $75bn in green financing from 2022 to 2030, with over $20bn already funded as of mid-2023. COP28

The bank’s COP28 strategy encompasses six key areas including accelerating sustainable finance to enhance the UAE’s role as a prominent hub for green finance, supporting customers and partners in transitioning towards zero carbon emissions and pioneering innovation in production processes and knowledge sharing to develop carbon markets.

Abu Dhabi Commercial Bank

ADCB pledged to take measures to accelerate the expansion of its contribution to the strategic initiative to achieve net zero.

The bank’s measures include developing an ambitious plan to reduce its carbon footprint based on scientific foundations while taking steps to curb its greenhouse gas emissions and disclosing them.

Abu Dhabi Islamic Bank

ADIB’s new environmental, social and institutional governance strategy for the next three years seeks to accelerate green financing and investment initiatives.

The bank allocated $1.7bn to finance sustainable projects within the framework of green financing. Sustainable finance

Last year, ADIB developed a new sustainability framework comprising six pillars. Each pillar aligns with national goals such as the UAE Net Zero by 2050 initiative, Principles of the 50 and the Climate Change National Plan.

Emirates NBD

Dubai-based Emirates NBD’s sustainable and responsible business practices have had a direct and meaningful impact on the industries and markets it serves. The banking group recently signed the UAE Climate-Responsible Companies Pledge as part of its efforts to achieve climate neutrality and support the country’s decarbonisation efforts.

Emirates NBD joined the UAE Gender Balance Pledge in June and the bank. The bank is working closely with the UAE Gender Balance Council to achieve the UN Sustainable Development Goal 5, as a pledge member.

Dubai Islamic Bank

Dubai Islamic Bank is committed to helping the UAE achieve its long-term sustainability goals, including net zero by 2050.

The shariah-compliant bank issued $1bn sukuk in June 2023, its second sustainable Islamic bond and the largest sustainable issuance ever by a financial institution in the Middle East.

Mashreq

Mashreq provided $20bn in sustainable financing in the first half of the year and is on track to achieve its goal of $30bn by 2030.

The bank’s sponsorship of COP28 confirms its firm support for efforts to address climate change and ensure a sustainable future for all. Gulf Business

The banking sector is central to the world’s efforts to combat climate change by providing green financing and supporting climate initiatives. The sector can leverage its lending power to encourage businesses and individuals to invest in sustainable projects, such as renewable energy, energy efficiency, sustainable agriculture, and waste management.