By Muhammad Aamir
ABU DHABI, 19th September, 2023 (WAM) -- National banks in the UAE are playing a pivotal role in promoting sustainable financing and supporting climate neutrality initiatives, in line with the UAE government's vision to promote sustainable economic growth and achieve net zero by 2050.
The banking sector's significant role in combating climate change by providing green financing and supporting climate initiatives is summed up in the following report. The Emirates News Agency (WAM) will look into the proactive role of the banking sector in combatting climate change through green financing commitments and climate initiatives.
In light of the increasing significance of climate finance, national banks have achieved significant milestones. These include substantial investments in sustainable financing, support for the transition to a green economy, and pioneering efforts in the region. These achievements underscore the success of the national banking sector in developing sustainable banking solutions.
These initiatives from national banks align with the UAE's goal of enhancing the prominence of COP28 as a crucial milestone in addressing climate change challenges.
According to the UAE Banks Federation (UBF), six major banks (FAB, ADCB, ENBD, DIB, Mashreq, and ADIB) have collectively dedicated over AED 190 billion (US$51.8 billion) in green financing for various projects in renewable energy, waste-to-energy, and green technology by the end of 2022.
First Abu Dhabi Bank (FAB)
FAB, a strategic partner in the COP28 conference, is aligned with the country's vision of actively shaping a sustainable future. The bank has committed to providing $75 billion in green financing from 2022 to 2030, with over $20 billion already funded as of mid-2023.
FAB's COP28 agenda encompasses six key areas: accelerating sustainable finance to bolster the UAE's role as a prominent hub for green finance, supporting customers and partners in transitioning towards zero carbon emissions, promoting awareness of environmental, social, and corporate governance (ESG) practices within the SME sector, pioneering innovation in production processes and knowledge sharing to develop carbon markets, supporting ecosystem restoration and biodiversity preservation, and empowering individuals, from students to senior executives, to actively participate in environmental initiatives.
Abu Dhabi Commercial Bank (ADCB)
ADCB has joined the Climate Responsible Companies Pledge initiative, demonstrating its commitment to supporting the UAE's climate action agenda and the strategic goal of achieving climate neutrality by 2050.
As part of the pledge, ADCB committed to taking a set of special measures to accelerate the expansion of its contribution to the strategic initiative to achieve net zero. These measures include developing an ambitious plan to reduce the Bank's carbon footprint based on scientific foundations and continuing the current practices adopted by the Bank in measuring its greenhouse gas emissions and disclosing them.
Abu Dhabi Islamic Bank (ADIB)
ADIB's new environmental, social and institutional governance strategy for the next three years aims to give priority to accelerating green financing and investment initiatives. ADIB has allocated $1.7 billion to finance sustainable projects within the framework of green financing.
Last year, ADIB developed a new sustainability framework comprising 6 pillars, each pillar containing specific areas, in line with national goals, including the UAE Net Zero by 2050 strategic initiative, Principles of the 50, the Climate Change National Plan, the National Green Economy for Sustainable Development and Abu Dhabi Economic Vision 2030.
Emirates NBD (ENBD)
Emirates NBD is participating in COP28 as a supporting partner of the process, with its aspiration to cooperate with all partners in a way that contributes to advancing meaningful and constructive dialogue and taking the necessary measures to work towards achieving the common ambition to address climate change and move to a climate-neutral and emissions-free future. With a commitment to support the UAE's strategic initiative to achieve climate neutrality by 2050, to lead the country to become a sustainable, knowledge-based economy.
Emirates NBD's sustainable and responsible business practices have had a direct and meaningful impact on the communities it serves, and the group continues its pioneering journey in building more inclusive and empowered societies. It has taken the lead in the region in providing carbon futures trading services, contributing to meeting the growing demand from companies to manage their carbon emissions and supporting the national strategy to achieve climate neutrality by 2050.
As part of its efforts to achieve climate neutrality, Emirates NBD recently signed the UAE Climate-Responsible Companies Pledge initiated by the UAE Ministry of Climate Change and Environment, in line with the commitment to support the country's decarbonisation efforts. The group joined the UAE Gender Balance Pledge in June 2023. This pledge is aligned with the group's commitment to gender equality and diversity.
As a pledge member, the banking group will work closely with the UAE Gender Balance Council to achieve the UN Sustainable Development Goal 5 (achieve gender equality and empower all women and girls).
Dubai Islamic Bank (DIB)
Dubai Islamic Bank, a leader in sustainable finance, is committed to helping the UAE achieve its long-term sustainability goals, including net zero by 2050. In June 2023, the bank issued its second sustainable sukuks worth $1 billion, the largest issuance by a banking institution in the region and the largest sustainable issuance ever by a financial institution in the Middle East. This demonstrates Dubai Islamic Bank's leadership in the Islamic and sustainable finance sector and its commitment to the UAE's preparations for COP28.
Mashreq is a supporting partner of COP28 and is committed to supporting sustainable financing and climate action. The bank has already provided $20 billion in sustainable financing in the first half of 2023 and is on track to achieve its goal of providing $30 billion by 2030. Mashreq's sponsorship of COP28 confirms its firm support for efforts to address climate change and ensure a sustainable future for all.
The banking sector has a significant role to play in combating climate change by providing green financing and supporting climate initiatives. They can use their lending power to encourage businesses and individuals to invest in sustainable projects, such as renewable energy, energy efficiency, sustainable agriculture, and waste management. They can also support climate initiatives by investing in their own operations, such as by reducing their own energy consumption and greenhouse gas emissions.