With UAE’s climate change goals, banks are ready to play their part
Backing green projects is just one aspect of what should be banking sector’s priority
As the world turns its attention to the UAE in preparation for COP28, the most important annual climate conference globally, the country’s commitment to sustainability and environmental responsibility takes centre stage.
The UAE is expected to focus even more prominently on collaborating with regional institutions to develop effective strategies for climate change, and showcase its progress on a global scale in a way that reflects unified national commitment to climate action.
Setting the scene
COP28 will serve as a pivotal moment for the international community to collectively tackle the pressing issue of climate change. As the host country, the UAE will have a unique opportunity to demonstrate its commitment to and progress on climate action.
The UAE has been actively investing in renewable energy sources and implementing innovative technologies to reduce carbon emissions with the aim to achieve Net Zero emissions by 2050. This has garnered international recognition and serves as a model for other nations.
It is clear that the UAE’s commitment to ESG principles has become a fundamental component of its narrative. The efforts to cut carbon emissions, diversify energy sources, and promote long-term economic growth offers a notable example for the region and beyond. These achievements demonstrate the country's willingness to accept creative ideas and incorporate sustainability at all levels of society.
The role of regional banks, whose impact extends beyond financial transactions, is important to this journey.
Banks’ role in advancing UAE’s climate efforts
How can UAE-born banks and the wider financial industry regionally support the UAE’s sustainability journey and proposition? Financial institutions, as providers of economic success, hold a significant duty to assist in the transition to a greener, more sustainable economy.
Their commitment, motivated by a growing understanding of the link between finances and the environment, is critical to moving the UAE's sustainability strategy forward.
The key role of regional banks in incorporating ESG principles into their own business and growth strategies is central to this movement, as it fully aligns with the nation's sustainable goals. UAE banks are making progress in their own corporate sustainability journeys, increasingly incorporating ESG factors into their business models and practices, as well as making commitments and setting ambitious targets to deploy green financing for renewable energy, waste-to-energy, and green technology projects.
As the foundation of economic activity, these institutions are demonstrating that profitability and responsible lending practises can coexist. Regional banks play an important role in connecting financial success with environmental well-being, by facilitating sustainable financing alternatives and promoting initiatives that champion environmental preservation.
Through their ability to direct capital flows and provide solutions that go beyond the realm of financing, banks can work closely with corporates to advise them on how to transition to more sustainable practices, manage their risks, and access the right kind of sustainable financing for their specific needs.
Link up on green ambitions
This includes funding for capital expenses, operational expenses, and even employee retraining and brand awareness. Banks can also significantly contribute to furthering the nation’s journey towards a sustainable future by focusing on advocating for regulatory support, creating transition-oriented financial solutions, and collaborating with the private sector.
For Mashreq, a firm commitment to driving change in an era defined by climate awareness and sustainability imperatives is vital. Our objective is to make a beneficial, long-term impact across the range of our relationships, not just financial gains.
Our objective is to make a beneficial, long-term impact across the range of our relationships, not just financial gains.
The UAE's partnership with regional banks is both necessary and inspirational. It demonstrates the potential for combined efforts to promote positive change, providing hope for the future for generations to come.
By collaborating with regional banks, the UAE effectively leverages their knowledge and resources to embrace sustainable practises and investments, which not only reinforces the nation's commitment to the environment but also acts as a model for other countries seeking a sustainable and successful future.