UAE's SFWG Launches 'Principles For Sustainability-Related Disclosures For Reporting Entities'

The UAE Sustainable Finance Working Group (SFWG) has launched the 'Principles for Sustainability-Related Disclosures for Reporting Entities' in line with the UAE's commitment to sustainability and the announcement of 2024 as the 'Year of Sustainability'. This initiative aims to upgrade requirements for sustainability-related disclosures for financial institutions in the UAE, aligning them with international best practices.The principles serve as a declaration of common understanding among the members of the UAE SFWG, including the Securities and Commodities Authority (SCA), the Central Bank of the UAE (CBUAE), the Dubai International Financial Centre, and the Financial Services Regulatory Authority of Abu Dhabi Global Market (ADGM). The signing ceremony took place in Abu Dhabi and was attended by key representatives from these organizations.Mohammed Ali Al Shorafa Al Hammadi, Chairman of the SCA, expressed his gratitude to the UAE SFWG members for their efforts in reaffirming the UAE's commitment to transitioning to a sustainable green economy. He emphasized that this initiative is a significant milestone in achieving the goals outlined in the National Climate Change Plan 2050 and enhancing the UAE's global competitiveness.The principles focus on developing and implementing disclosure frameworks related to environmental, social, and governance (ESG) factors. They outline four major considerations for reporting entities: having adequate policies, procedures, and systems for reporting on sustainability-related matters; taking into account transparency, materiality, relevance, and stakeholder engagement when disclosing information; ensuring that disclosures reflect their operational practices in areas such as governance, strategy, and risk management; and considering specific elements when dealing with and offering sustainability-related products to enhance transparency and quality.Khaled Mohamed Balama, Governor of the CBUAE, highlighted the UAE Central Bank's commitment to promoting sustainability in the banking and insurance sectors. He emphasized that launching these principles is a crucial step towards establishing a leading global status for the UAE in sustainable finance and achieving climate neutrality by 2050.Ahmed Jassim Al Zaabi, Chairman of the Board of Directors of the ADGM, commended the SFWG's efforts in promoting sustainable finance and driving transparency and proper disclosure among financial institutions. He mentioned that ADGM has introduced its own ESG Disclosures Framework to enhance sustainability reporting and integrate sustainability into finance.Essa Kazim, Governor of the Dubai International Financial Centre (DIFC), highlighted DIFC's comprehensive sustainability programs in collaboration with the government. He emphasized that the principles announced by the SFWG further demonstrate the financial sector's role in addressing climate change and transitioning to a sustainable economy.The UAE SFWG member authorities will officially release these principles for licensed financial institutions, encouraging them to promote transparency in sustainability-related matters. This initiative aims to serve the interests of all stakeholders in the UAE and contribute to the development of an integrated sustainable finance ecosystem.In conclusion, the launch of the 'Principles for Sustainability-Related Disclosures for Reporting Entities' represents a significant step towards achieving the UAE's sustainability goals. By upgrading requirements for sustainability-related disclosures, the UAE is aligning itself with international best practices and establishing itself as a regional and international reference for climate neutrality. This initiative will contribute to the development of a sustainable green economy and enhance the UAE's global competitiveness.

With inputs from WAM