Progress in Green Financial practices in the Middle East and North Africa Regions
**Emirates NBD Leads the Way in Sustainable Finance in the MENAT Region**
In a significant stride for the financial sector in the Middle East, North Africa, and Turkey (MENAT) region, Emirates NBD has published its sustainability report, marking a milestone in the integration of Environmental, Social, and Governance (ESG) principles.
The report, aligned with the international standards set by the International Sustainability Standards Board (ISSB), represents a significant step forward for the bank and the MENAT region. Vijay Bains, CFO of Emirates NBD, commented that the bank is proud to be the first in the MENAT region to publish an inaugural report aligned with ISSB standards.
The publication of the sustainability report by Emirates NBD is a significant event in the financial sector of the MENAT region. The report includes specific disclosures on sustainability risks and opportunities that meet IFRS S1 standards, and climate change transparency requirements as per S2. This move towards greater transparency and accountability is in line with the bank's commitment to promoting sustainable finance.
Emirates NBD's adoption of the IFRS criteria for its sustainability report is a significant step forward for financial sustainability in the MENAT region. The IFRS criteria were issued by the International Sustainability Standards Board (ISSB) to promote greater uniformity and transparency in global financial market reporting.
The report also highlights Emirates NBD's progress in various areas. For instance, the bank achieved a 15% reduction in Scope 1 & 2 emissions in the UAE compared to 2023. The bank has future goals, including achieving net zero by 2050, allocating $30 billion for sustainable finance by 2030, and increasing the proportion of women in management to 25% by 2027.
While the Middle East is rapidly advancing in ESG integration, the EU remains a leader in regulatory frameworks, and the US is driven by market forces and private sector initiatives. The EU has well-established ESG frameworks and regulations, such as the EU Taxonomy and the Sustainable Finance Disclosure Regulation (SFDR), which provide a comprehensive framework for ESG reporting and investment.
The private sector in the Middle East is also increasingly involved in infrastructure and renewable energy projects, often incorporating ESG criteria. This includes involvement in large-scale projects like Expo 2030 Riyadh and Dubai's urban planning. The private equity sector is also undergoing significant changes, with a focus on transparency, risk management, and governance.
However, the report by Ernst & Young reveals that while 70% of MENAT banks had published sustainability plans and strategies by the end of 2023, only one in five (20%) banks offered incentives and bonuses to managers tied to ESG objectives in addition to regular commercial performance. Furthermore, only one in three banks had appointed a chief sustainability officer, and 45% lacked an ESG committee or commission at any level.
The ISSB report released by Emirates NBD is a testament to the bank's commitment to sustainable finance and its leadership in the MENAT region. In 2024, the bank raised $2.25 billion in funds for the energy transition on global capital markets, further demonstrating its dedication to promoting sustainable finance. As the MENAT region continues to advance in ESG integration, Emirates NBD is set to play a crucial role in shaping the future of sustainable finance in the region.
- Emirates NBD's ambitious goal is to allocate $30 billion for sustainable finance by 2030, demonstrating their commitment to sustainable living and business practices.
- In the realm of science, Emirates NBD's sustainability report aligns with the standards set by the International Sustainability Standards Board (ISSB), fostering a culture of climate-change transparency and environmental-science within the financial sector.
- The bank's publication of the sustainability report has brought the notions of sustainable finance and home-and-garden practices to the forefront of the MENAT region's financial sector, marking a shift in the lifestyle of its institutions.
- The growth in sustainable finance is not limited to the MENAT region, as the EU and US lead in ESG frameworks and market forces, respectively, signifying a global shift towards a more sustainable financial future.
