Dubai: Companies in the UAE will have to provide full and consistent disclosures on their ESG (environmental social governance) initiatives as part of the country’s ‘Net Zero 2050’ ambitions.
Public and private sector enterprises will also have to strengthen their corporate governance standards on the sustainability agenda. The third key initiative will be to “develop a UAE taxonomy of sustainable activities’. A study will be taken up to get going on the implementation of these three key targets.
This comes after a meeting of the UAE Sustainable Finance Working Group, made up of key regulators in the corporate and financial space, including the Central Bank of the UAE as well as ADGM (Abu Dhabi Global Marketplace). The Group issued a ‘High-Level Statement on Sustainable Finance’ detailing a collective commitment to achieving the UAE’s sustainability objectives. The UAE was the first country in the Middle East to detail plans to be a net zero nation by 2050.
'Net Zero' relates to the balance between greenhouse gases produced and the amount removed from the atmosphere through efforts by nations, organisations and individuals.
The financial regulators must work together to establish standards that support the development of a sustainable economy with long-term value returns. At ADGM are responsible for setting out robust frameworks that promote greater adoption of sustainable financing
"The Statement sets a clear and much needed roadmap for the participating authorities to contribute to the UAE’s sustainable and climate change objectives, outlined in global frameworks, such as the Paris Agreement, the UN Sustainable Development Goals, and the nation’s own UAE Net Zero by 2050 strategic initiative."
- The immediate priorities are to launch a study aimed at encouraging consistent Environmental Social and Governance related corporate disclosure standards across the UAE.
- Examine how to strengthen good corporate governance by UAE companies to contribute to driving the sustainability agenda.
- Develop a UAE taxonomy of sustainable activities, which will then constitute a "major milestone defining the path for economic transition to sustainable development".
The Statement was issued on the sidelines of the 26th United Nations Climate Change Conference (COP26), where the “UAE is a committed partner striving to safeguard the environment, drive down emissions and create lasting economic opportunity”.
The implementation on the corporate governance and transparency on ESG will be achieved “through both legislative and non-legislative means and in coordination with the authorities on the monitoring and technical support required to incorporate sustainability into regulatory frameworks”.