Etihad Rail, the developer and operator of the UAE National Rail Network, has announced the launch of its sustainable finance framework, a comprehensive guide that aims to link the company’s future financing to its ESG strategy in relation to clean transportation, green buildings and pollution prevention and control.
Etihad Rail developed the framework in collaboration with various industry experts, First Abu Dhabi Bank and Standard Chartered Bank, who served as co-ESG advisors. The banks provide the developer with expertise and insights to ensure the framework’s robustness and alignment with the green loan and bond principles. Moreover, Etihad Rail validated the framework through a Second Party Opinion (SPO) from Det Norske Veritas (DNV).
Framework’s four key components
Etihad Rail’s sustainable finance framework establishes a structured approach to evaluate parameters in the financing of sustainable projects, detailing four main components:
- Green loan and bond principles: These principles ensure alignment with international sustainability standards.
- Use of proceeds: This component defines clear criteria for the allocation of funds towards sustainable projects.
- Project evaluation and selection: This component implements a rigorous process to identify impactful projects.
- Management of proceeds and reporting: Ensures transparency and accountability in fund utilization.
“This framework is a pivotal element of our broader ESG strategy, directly aligning with the United Nations’ Sustainable Development Goals. It provides a clear roadmap for integrating ESG considerations into investment decisions, empowering companies to generate long-term sustainable value,” stated Ali Tabbal, chief financial officer at Etihad Rail.
Tabbal added that by implementing the sustainable finance framework, Etihad Rail is fostering a transition to a low-carbon, resilient economy. In addition, it’s supporting the UAE’s Net Zero 2050 Strategy and contributing to the nation’s vision for a sustainable future.
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Transparent implementation of ESG initiatives
The framework also details mechanisms for environmental risk assessment and promotion of transparency in implementing ESG initiatives. By integrating environmental considerations into investment decisions, companies can mitigate environmental risks and capitalize on emerging sustainable markets. Moreover, they can solidify their commitment to environmental stewardship and social responsibility.
Therefore, the sustainable finance framework not only guides investment decisions but also fosters collaboration and knowledge-sharing among industry peers, regulators, and investors. This, in turn, accelerates the transition to a more sustainable financial system.
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