The UAE Banks Federation (UBF) has shared the active role played by the UAE banks in tackling climate change through green financing commitments and climate initiatives, recently. This has exhibited country’s banking and financial sector supportive role in UAE’s strategy to reduce emissions and achieve climate neutrality by 2050, and meet UN sustainable development goals (SDGs).
As per reports, UBF said that providing green finance and issuing green-oriented funds has emerged as a powerful mechanism to meet sustainability commitments of various organisations in the UAE in particular, and the region, in general.
The federation has been working closely with the Central Bank of the UAE (CBUAE) and all UBF members to support the transition to a sustainable economy.
According to data from UBF members, six major banks — FAB, ADCB, ENBD, DIB, Mashreq, and ADIB — have collectively dedicated more than Dhs190bn ($51.8bn) in green financing for various projects in renewable energy, waste-to-energy, and green technology by the end of 2022.
The growth in green funding by UBF members aligns with the guidelines of CBUAE’s Sustainable Finance Working Group, and sector-wide sustainability objectives, which support the initiatives that align with the ‘Year of Sustainability’ and the UAE’s hosting of COP28, said the report.
The federation has established a ESG steering committee comprising subject matter experts to drive the ESG and green finance sector to work in tandem with CBUAE’s policy.
Jamal Saleh DG of UBF image UBF IDC Jamal Saleh, Director-General of UBF, said, “We, at UBF, are committed to supporting its goals in delivering necessary changes in our UAE finance sector. And, in line with National Climate Change Plan of the UAE 2050 and United Nations’ SDGs, our financial sector is playing a pivotal role in helping the UAE achieve net zero emissions.”
Saleh also highlighted the partnership which UBF has entered into with UAE’s Securities and Commodities Authority (SCA), where SCA and UBF will join hands and make collective efforts to foster mutual cooperation in developing the financial sector, establishing the UAE as a major attraction for asset and wealth management in line with government’s aspirations for the next fifty years.
Talking about COP28, Saleh said, “Our member banks and financial institutions will play a critical role in integrating environmental values into business and industrial progress. We believe the upcoming COP28 will provide a platform for global discussions and action on climate change.
“The UAE hosting the event will enable collaboration with international stakeholders, sharing best practices and building partnerships to accelerate the implementation of sustainable finance initiatives,”said he.
UBF said, “ The country’s banks and financial institutions have initiated the issuance of green sukuk and bonds, whose total market in the UAE has been around Dhs62.4bn ($17bn) in recent years, with the aim of accessing institutional sources of financing that contribute to reducing the negative impact on the climate and environment and strengthen the sector’s role in achieving an integrated system for sustainable development, as well as providing attractive returns for investors.’
The Director General of UAE Banks Federation identified three major areas through which federation members will drive the transformation of the financial sector.
“First, driving green projects by providing funds and issuing green bonds. Second, by inculcating green practices among customers, SMEs, suppliers, and vendors by promoting eco-friendly operations and living, and thirdly, by measuring and managing UBF members’ individual carbon footprints and reporting the reductions achieved by the sector,” pointed out UBF.