UAE Major Banks Allocate Over AED 190 Billion For Green Financing

The UAE Banks Federation (UBF), representing the banking sector in the UAE, has highlighted the significant strides taken by the country’s financial industry in advancing sustainable banking solutions. Aligned with the UAE’s mission to achieve climate neutrality by 2050 and the United Nations Sustainable Development Goals, UBF commended the proactive engagement of banks in combatting climate change through green financing commitments and climate initiatives. The establishment of green finance mechanisms and the issuance of eco-oriented funds have emerged as powerful tools to meet sustainability objectives across the region. UBF collaborates closely with the Central Bank of the UAE and its members to pave the way for transitioning towards a sustainable economy.

UBF revealed that major banks, including FAB, ADCB, ENBD, DIB, Mashreq, and ADIB, have collectively allocated over AED 190 billion (US$51.8 billion) for green financing across various renewable energy, waste-to-energy, and green technology projects by the close of 2022. This substantial investment aligns with the Central Bank’s Sustainable Finance Working Group guidelines and wider sectoral sustainability targets, in harmony with the “Year of Sustainability” initiative and the upcoming COP28 hosted by the UAE.

In a strategic move, UBF is part of the Net-Zero Banking Alliance, uniting banks globally to align lending and investments with net zero emissions by 2050. A robust ESG steering committee, comprising experts, drives UBF’s green finance sector under the guidance of the Central Bank’s policies, reinforcing principles and frameworks for sustainable finance.

Mr Jamal Saleh, Director General of the UAE Banks Federation, emphasized the central role of the financial sector in promoting sustainability and driving the UAE towards net zero emissions. The UAE has been a pioneer in embedding sustainability principles in its banking sector, introducing various initiatives like the Abu Dhabi and Dubai Sustainable Finance Declarations, Guiding Principles for Sustainable Financing, and the National Sustainable Finance Framework.

UBF is taking a three-pronged approach to transforming the financial sector: boosting green projects, promoting eco-friendly practices, and managing carbon footprints. Mr Saleh highlighted the importance of the upcoming COP28 event, hosted by the UAE, in advancing global climate discussions and actions. It will serve as a platform for international collaboration, knowledge exchange, and partnerships to accelerate sustainable finance endeavors. UBF also entered into a partnership with the UAE’s Securities & Commodities Authority (SCA) to foster mutual cooperation in developing the financial sector, aligning with the government’s long-term aspirations.

As the UAE continues to set the benchmark for sustainability standards, its banking and finance sector is poised to lead the way in shaping a climate-neutral, resource-efficient, and resilient economy.