Supporting the UAE’s road to net zero as countdown to Cop28 begins

Climate technology innovation and a commitment to fund support green and transition projects are critical

The UAE hosts the UN Cop28 summit this year. Getty Images

It is 179 days until the UAE opens the doors to Cop28, the world’s largest annual climate gathering, and the first global stocktake since the Paris Agreement was signed in 2015.

That may seem like a lot of time, but it is an extremely tight window considering the magnitude of change needed to help get the world pointing in the right direction now to have a chance of achieving net zero by 2050.

This year is already looking like being the hottest on record – a stark reminder of what is at stake.

Climate technology innovation and strong commitments to dedicating funds to support green and transition projects are integral to making Cop28 a success, helping drive the UAE’s Year of Sustainability in 2023, and, most critically, moving the needle towards net zero.

We know the opportunities and risks that lie ahead, which is why we plan to almost double the $15.5 billion worth of sustainable finance we have facilitated until the end of 2022 to reach $30 billion by 2030 – a very short seven years away.

We are expanding our efforts to support our clients by spearheading sustainable finance instruments such as green, social, sustainable, and sustainability linked bonds and loans.

Succeeding in today’s global marketplace means making sustainability second nature across every facet of a business – in our culture, our operations and our aspirations.

We have entered a marathon, along with the rest of the world’s financial community.

Already, the UAE has set a zero-nonsense approach to Cop28, prioritising real-world progress for when more than 70,000 stakeholders gather in November.

This is particularly vital, as Cops have historically faced pressure for achieving more dialogue than action.

The tone of such critique shifted during Cop27 in Egypt last November, but the global spotlight is now focused on the UAE – and all its key stakeholders – to achieve a paradigm shift in what is arguably the modern world’s most complex journey yet.

That the UAE, the third largest oil producer in Opec, is so focused on sustainability illustrates this ultra-juggling act: simultaneously to protect energy security, ensure climate stability and bolster growth.

Global green financing has grown more than 100-fold in the past decade, reaching $540.6 billion in 2021, rising from 0.1 per cent of the world’s financing activity in 2012 to 4 per cent a decade later, according to a study from the finance industry body TheCityUK and BNP Paribas.

This reveals two things: appetite for green financing has substantially grown over the last few years, and there are growing opportunities for those corporations committed to supporting the UAE’s sustainability journey.

Looking ahead, green investments in six key industries in the GCC could have a profound impact by 2030, unlocking up to $2 trillion in cumulative gross domestic product contribution, creating more than one million jobs, and encouraging foreign direct investment, according to research by global consultancy PwC.

Now, all eyes are rightly on how banks and their clients are integrating environmental, social and governance (ESG) into every boardroom decision.

At Mashreq, we have been releasing comprehensive annual sustainability reports since 2020 and reinforcing ESG credentials throughout our business structure and operations.

Our initiatives have saved 1,229,000 kilowatt hours of energy in the past. This roughly equates to 41,000 gallons of fuel per GHG calculations – enough to nearly fly to the Moon and back, twice. Our efforts have also enabled us to recycle more than 202,600 kilograms.

As we get closer to Cop28, the banking sector must align with the climate objectives of the UAE and welcome government efforts to advance us towards climate action and a cleaner, more prosperous future.

The UAE is already renowned for its dedicated work towards substantial financial and environmental developments, and we are excited about endorsing this track record, supporting its net zero journey, and seeing this nation take on even greater leadership in climate action.

Ahmed Abdelaal is group chief executive of Mashreq