Today's Edition
A. SREENIVASA REDDY (ABU DHABI)
Saudi Arabian and UAE issuers together accounted for 68% of total global ESG sukuk issuances as of the end of the first nine months of 2025, underlining the Gulf’s dominance in the fast-growing sustainable Islamic finance market, according to Fitch Ratings’ Global ESG Sukuk Market Monitor (3Q25).
“As of the end of September 2025, the total ESG sukuk outstanding in the UAE stood at $11.79 billion across all currencies,” Bashar Al-Natoor, Global Head of Islamic Finance at Fitch Ratings told Aletihad. “In the first nine months of 2025, ESG sukuk issuances from UAE-based entities reached around $3 billion, reflecting continued momentum in sustainable Islamic finance.”
He added: “The third quarter alone saw $1.25 billion in ESG sukuk issuances from the UAE, underscoring the country’s active role in the global ESG sukuk market. Notably, all ESG sukuk issuances from the UAE in 2025 have been dollar-denominated, highlighting the strong appetite among international investors.”
Fitch said the GCC region held more than half of all outstanding ESG sukuk globally, with Malaysia and Indonesia comprising about 42 per cent. The agency expects these markets to remain key leaders in the medium term, supported by robust policy frameworks and sustainability-linked financing guidelines.
Globally, ESG sukuk issuance surged by 46% year-on-year to $13.5 billion by the end of September 2025 — a new full-year record. The third quarter alone saw more than $6.5 billion in new ESG sukuk, marking the highest quarterly issuance on record. Around 75% of issuances were dollar-denominated, with corporates and financial institutions each contributing over 40% of total volume, while sovereigns represented 13%.
Within the GCC, UAE-based issuers continued to play a leading role, accounting for a significant share of the global market. Fitch data show that the UAE’s hard-currency ESG sukuk represent 43% of its total ESG bonds and sukuk portfolio. This reflects the strong appetite among UAE institutions to tap international capital markets through sustainable instruments.
The report identified Saudi Arabia and the UAE as key anchors of issuance momentum, supported by active sovereign and financial-sector participants. The two markets have also led in subordinated ESG sukuk, a category that reached nearly $5 billion in 2025, driven mostly by Saudi issuers.
Fitch expects ESG sukuk to retain a prominent role in emerging markets, noting that it now accounts for more than 40% of ESG US dollar debt issuances (excluding China) across developing economies in 2025. Most of these instruments are listed on Nasdaq Dubai, the London Stock Exchange, Frankfurt and Stuttgart, underscoring the increasing internationalisation of Gulf-based sukuk markets.
