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The UAE’s banking sector has been toeing the line in tandem with UAE Net Zero 2050
and the energy diversification strategy, launching sustainability frameworks and
financing some of the biggest renewable projects, all the while fighting climate change
with environmental campaigns and activities, a top official said.
“This reaffirms the sector’s commitment to UN Sustainable Development Goals (SDGs)
and aims to contribute to making green energy affordable and accessible in the country
and wider region, primarily through the issuance of green financing and funds,” Jamal
Saleh, Director General of UAE Banks Federation – the sole representative and unified
voice of banks in the UAE, told Al Maktoum Investment Magazine.
Apart from financing, banks have been adopting innovative technologies and embracing
digitization to reduce their carbon footprints by way of paperless transactions, improving
energy efficiencies through “green buildings” retrofitting and smart facility management
to conserve electricity, recycle waste and plastic, as well as monitoring to reduce their
greenhouse gas (GHG) emissions. Thus, contributing to the UN’s goals of building
resilient infrastructure and fostering innovation.
Saleh underlined that the UAE banking sector’s efforts and initiatives aim to “transform
the finance industry into a force for driving sustainability”.
UAE banks have been fervent in implementing sustainable finance frameworks and
building robust green finance infrastructure to support green projects and initiatives.
According to published data from six major banks: First Abu Dhabi Bank (FAB), Abu
Dhabi Commercial Bank (ADCB), Emirates NBD, Dubai Islamic Bank, Mashreq Bank
and Abu Dhabi Islamic Bank, green financing for various projects, in committed and
allocated loans, bonds and investment funds, amounts to $51.8 billion (more than
Dh190 billion).
Mashreq Bank
Green bonds issued by UAE banks to finance environmental projects have been vital in
securing investments for renewable and sustainability projects. For example,
sustainability- and adaptation-linked investments worth $15.5 billion have been financed
by Mashreq Bank.
The bank formed its very first internal Sustainability Working Group (SWG), which will
be accountable for assessing current and potential Environmental, Social, and
Governance (ESG)-related risks and opportunities, reviewing the existing framework to
manage such risks, prioritizing ESG initiatives for immediate implementation, setting
targets, and monitoring performance against established key performance indicators
(KPIs).
Abu Dhabi Commercial Bank
Abu Dhabi Commercial Bank (ADCB) has recently been recognized by the UAE
government for the bank’s strong track record in sustainability and social impact. The
bank has committed $13.6 billion to green financing by 2030 under its ADCB
Green/Sustainable Bond Framework. The framework adopted last year was launched
with inaugural $500 million funding to help finance low-carbon initiatives like wind
turbines and solar panels.
First Abu Dhabi Bank
FAB has allocated $1.16 billion by 2022 to various green projects, such as three solar
power plants that will help reduce CO2 emissions, seven “green buildings” for energy
efficiency and a wastewater plant that can treat up to 430,000 cubic metres of water
every day.
The bank’s green financing efforts have supported UAE’s solar energy initiative
highlighted by the Mohammed Bin Rashid Al Maktoum Solar Park (MBR), which will be
the largest single-site concentrated solar power plant in the world with a planned
production capacity of 5,000 MW by 2030. When completed, it will provide clean energy
for 320,000 residences and save over 6.5 million tonnes of carbon emissions annually.
Emirates NBD
As per the Emirates NBD’s annual Environmental, Social, and Governance (ESG)
report, the bank has issued some $11.35 million in ESG bonds as conventional and
sukuk financing over the past three years to support various projects. Some $50.63
million was also issued in “sustainable loan solutions,” which covered agriculture,
projects to reduce greenhouse gas emissions, and increasing the use of renewable
energy.
Abu Dhabi Islamic Bank
Abu Dhabi Islamic Bank has put in motion a new three-year ESG strategy that
prioritizes accelerating its green financing and investing initiatives, having already made
significant strides in this area with the allocation of $1.7 billion towards sustainable
project financing.
Dubai Islamic Bank
Dubai Islamic Bank introduced a Sustainable Finance Framework (SFF) ESG credit risk
policy and scorecards and issued sukuk of $705 million in 2022, the first-ever
Sustainable Sukuk from a UAE Financial Institution. In addition, ESG funding during the
year booked new green financing of approximately $367 million. Over the past several
years, the bank has participated in more than $7 billion of green Islamic capital market
transactions globally.
Prominence of COP28
Saleh underlined that COP28 is a powerful platform for the UAE banking sector.