Today's Edition
Hussam Abdelnabi (ABU DHABI)
The UAE’s banks are undertaking multiple sustainability-geared initiatives to support the country’s emissions reductions strategy and goal to achieve climate neutrality by 2050.
These initiatives have surpassed development phase, and are now financing green projects, issuing green bonds, announcing global partnerships to achieve climate neutrality and reduce greenhouse gas emissions, and developing sustainable logistics services for shipments, bank facilities, and transportation. Other initiatives are addressing emissions related to procurement and services, waste from operations, overseas business travel, employee transit, and leased assets.
Banks have also announced various initiatives to engage stakeholders in climate action and create a community that is concerned for and committed to the environment.
As for green financing, Jamal Saleh, the General Manager of the UAE Banking Federation, revealed that the total green financing of six UAE banks (First Abu Dhabi Bank, Abu Dhabi Commercial Bank, Emirates NBD, Dubai Islamic Bank, Mashreq, and Abu Dhabi Islamic Bank) exceeded Dh190 billion by the end of last year.
These funds were allocated to various projects in renewable energy, waste-to-energy conversion, and green technology, showcasing sustainable banking solutions developed by the UAE’s banking and financial sector in line with the country’s strategy to reduce emissions and achieve climate neutrality by 2050 and the United Nations’ Sustainable Development Goals.
The significant growth in total green financing from member banks of the UAE Banking Federation results from the Central Bank of the UAE’s (CBUAE) initiatives and directives to enhance green and sustainable financing. Sustainability is a strategic priority for the CBUAE, and the bank has launched several initiatives to ensure compliance with environmental, social, and institutional governance, under the idea that cooperation in defining an accountability framework and applying best practices will encourage the transition to a climate-neutral and resource-efficient economy, Saleh said.
As part of its efforts to accelerate the sustainability shift, the UAE Banking Federation will focus on green financing, issuing green bonds, promoting sustainable practices, and encouraging customers, SMEs, suppliers, and vendors to adopt environmentally friendly lifestyles. The Federation will also work with member banks to efficiently manage and disclose the impacts of emissions, Saleh added.
In line with the Abu Dhabi Commercial Bank’s commitment to supporting the UAE’s climate neutrality by 2050 initiative, the bank announced $650 million in green bonds last month, the proceeds of which will be allocated for eligible green projects that are consistent with the bank’s framework, the UAE Banking Federation General Manager said.
Alaa Arikat, the CEO of the Abu Dhabi Commercial Bank Group, said that the bank’s second green bond issuance represents a significant milestone in the bank’s climate strategy, which intends to offer green financing solutions to help further the country’s 2050 initiative. The Abu Dhabi Commercial Bank is fully prepared to support its clients in transitioning to a carbon-free economy, Arikat said.
Reducing EmissionsAs part of their sustainability efforts, the UAE banks have developed initiatives to reduce the carbon emissions resulting from their operations. In this context, the Commercial Bank of Dubai announced its commitment to achieving climate neutrality by reducing greenhouse gas emissions resulting from the bank’s operations by 50% by 2030.
The initiative also covers emissions reductions targets for activities financed by the Commercial Bank of Dubai.
Dr. Bernd van Linder, CEO of the Commercial Bank of Dubai, emphasised the bank’s keenness to take proactive steps to directly address climate change. According to van Linder, the basis for the emissions reductions strategy is one of the most comprehensive and integrated guiding principles in the UAE.
The Commercial Bank of Dubai’s carbon emission reduction strategy focuses on reducing emissions from the bank’s facilities and transportation, in addition to implementing initiatives to address emissions related to procurement, services, waste from operations, overseas travel for work, employee commutes, and leased assets in both the initial and final stages.
He pointed out that the Commercial Bank of Dubai has also embarked on a transformation programme to support its customers in reducing their carbon footprints by offering a range of sustainable financing solutions. This year, the bank introduced its sustainable financing framework and successfully launched its first green bond issuance worth $500 million.
Logistics ServicesIn the same vein, Bushra Al Shehhi, CEO of Human Resources for the Group at Abu Dhabi Islamic Bank, said the bank is the first in the Middle East and North Africa region to sign a cooperation agreement to reduce the quantity of carbon dioxide emissions associated with its logistics services for shipments by 30% by the end of 2023.
The bank signed the agreement with DHL, a specialised logistics services company, to achieve the bank’s commitment to reducing its emissions through its “Go Green Plus” sustainable shipping service.
The agreement also reaffirms the bank’s commitment to reduce its indirect third-party emissions, which are associated with the bank’s activities throughout its value chain, including transportation and distribution activities.
