Credit By: Khajeel Times
At the 28th United Nations Climate Change Conference (COP28), a historic promise was made in Dubai, a leader in global environmental initiatives. In line with the country’s Plan for Net Zero by 2050, senior officials declared that the banks and financial industry in the United Arab Emirates would raise over Dh1 trillion ($272.5 billion) in sustainable financing by 2030.
1. Central Bank’s Vision:
The governor of the Central Bank of the United Arab Emirates, Khaled Mohamed Balama, stressed the importance of the banking industry in supporting the country’s economic policies and reaching the lofty goal of Net Zero by 2050. He emphasized the importance of keeping corporate clients’ transition and climate adaptation plans, from investing in green projects to supporting carbon-intensive industries.
2. National Drive for Net Zero:
In line with the Paris Agreement, the UAE Net Zero by 2050 effort seeks to attain net-zero emissions by then. The country’s commitment to combating climate change and promoting sustainable socioeconomic growth is demonstrated by this strategic initiative.
3. Global Climate Finance Trends:
According to the Global Landscape of Climate Finance 2023 report by Climate Policy Initiative, the average annual flows in 2021–2022 were close to $1.3 trillion, a doubling from 2019–20 levels. According to Moody’s Investors Service, worldwide bank exposure to climate change is growing, and sustainable bonds issued globally are expected to reach $950 billion by 2023.
4. Central Bank’s Guiding Principles:
To assist Islamic finance institutions in creating sustainable finance plans, the UAE Central Bank released guidelines. By taking this step, the regulator is reaffirming its dedication to supporting ethical and sustainable financial activities that adhere to international norms.
5. TechSprint for Innovation:
The Central Bank started the COP28 UAE TechSprint, a cutting-edge program designed to speed up technological solutions to local financial institutions’ sustainability-related data concerns. This illustrates how the regulator is using technology to promote sustainable financing proactively.
6. UAE Banks Federation’s Commitment:
On behalf of regional financial institutions, Abdul Aziz Al Ghurair, Chairman of the UAE Banks Federation, announced the enormous commitment of Dh1 trillion for sustainable transformation and climate action. This pledge is a cooperative endeavour to promote significant change at the national level.
7. Minister’s Call for Active Engagement:
The Minister of Industry and Advanced Technology and President of COP28, Dr Sultan Ahmed Al Jaber, emphasized the financial sector’s vital role in achieving climate goals. He noted that collaboration at this scale is essential to addressing the problems posed by climate change and emphasized the significance of strategically allocating funds towards sustainable and climate-resilient investments.
In the worldwide effort to meet climate goals, the UAE’s pledge to raise Dh1 trillion in sustainable finance by 2030 is a historic accomplishment. The nation’s commitment to setting an example in the battle against climate change is demonstrated by the financial sector’s active engagement, which strategically focuses on green projects, transitioning industries, and promoting innovation.
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