UAE Enhances Global Leadership In Green Finance And Sustainable Development Initiatives

The UAE is advancing its leadership in green finance and sustainable development by implementing strategic policies. These initiatives aim to increase investment in sustainable projects and foster innovation within the sector. The nation is recognised as a regional exemplar in the Middle East, with a regulatory framework that supports green finance. This enhances its status as a global hub for sustainable investment, drawing international capital.

Bashar Al Natoor, Global Head of Islamic Finance and Managing Director at Fitch Ratings, has highlighted the UAE's achievements in Environmental, Social, and Governance (ESG) sukuk. This is a crucial element of the country's green growth strategy. According to Fitch Ratings, the value of outstanding ESG sukuk in the UAE reached about US$9.1 billion by Q3 2024, marking a 43 percent year-on-year increase.

The UAE’s total ESG bond portfolio is valued at $13.4 billion, reflecting a 59 percent year-on-year rise. ESG sukuk make up 40.6 percent of this portfolio. As of Q3 2024, ESG sukuk account for around 15.6 percent of the UAE’s overall sukuk issuance, up from 12.7 percent year-on-year.

The UAE holds a significant position within the Gulf Cooperation Council countries' ESG sukuk market with a 47 percent share. This underscores its leading role in the region. Globally, it ranks second after Malaysia, contributing to 20.5 percent of all ESG sukuk worldwide.

The UAE has pledged to mobilise AED1 trillion by 2030 for financing sustainable projects. This commitment supports its vision to become a regional leader in sustainability and innovation. It aligns with broader goals for resilience and sustainable economic growth amid future challenges.

PwC's findings confirm this commitment to sustainability and economic resilience. The UAE's efforts are part of a larger strategy aimed at fostering sustainable development while addressing potential future challenges effectively.

With inputs from WAM