MSCI upgrades Abu Dhabi Commercial Bank's ESG rating

The lender is now ranked among the top 29% corporations included in the MSCI ACWI Global Equity Index

MSCI has raised Abu Dhabi Commercial Bank's ESG rating by a notch. The National

Global index provider MSCI has upgraded Abu Dhabi Commercial Bank's environmental, social and governance rating by a notch, pushing the UAE’s third-largest lender among the global ESG corporate leaders.

ADCB’s MSCI ESG rating is upgraded to “AA” from “A”, which moves it among the top 29 per cent corporations included in the MSCI ACWI Global Equity Index for companies that are managing their ESG risks and opportunities, ADCB said in a statement on Sunday.

The rating upgrade was driven by the bank’s “digital transformation initiatives” to support small businesses, as well as its customer data protection and information security programmes.

Constant evolution of ESG standards is part of the company’s journey and it will be “embedded into our five-year business strategy”, Alaa Eraiqat, chief executive of ADCB, said.

“By effectively managing ESG risks and opportunities, ADCB is contributing to socio-economic development in the UAE and ensuring long-term sustainability of our business.

“This institutional strength allows us to provide consistently high-quality service to our customers and play a progressive and supportive role in our wider community,” he added.

Investors are becoming more discerning about investing in projects and companies that follow ESG standards as sustainable investment gains momentum across the globe in the wake of the Covid-19 pandemic.

According to the Forum for Sustainable and Responsible Investment, the amount of US-domiciled assets under management using sustainable investing strategies grew to $17.1 trillion at the beginning of last year, up from $12tn in 2018. They now account for about one-third of assets under professional management in the country.

The amount of sustainable debt – green bonds and loans – issued last year grew to $732.1 billion, a 29 per cent year-on-year increase, according to BloombergNEF.

ADCB on Sunday said the MSCI has underscored “favourably the low environmental intensity of the bank’s loan portfolio”.

The lender also “achieved industry-leading scores for consumer financial protection, data security and compliance”. ADCB’s governance score also rose, with the bank “ranking above average globally for business ethics”, it said.

In July, ADCB reported a 14 per cent rise in its second-quarter net profit on higher fee income and lower costs. Profit for the period climbed to Dh1.4bn ($381.5m), it said in a bourse filing at the time.