The UAE has reinforced its position as a global leader in green finance and sustainable development by implementing strategic policies aimed at increasing investment in sustainable initiatives and fostering innovation within the sector. The nation is recognized as a regional benchmark in the Middle East, thanks to its regulatory framework that supports green finance, thereby enhancing its stature as a global hub for sustainable investment and attracting international capital.
Advancements in ESG Sukuk
Bashar Al Natoor, global head of Islamic Finance and managing director at Fitch Ratings, emphasized the UAE’s advancements in Environmental, Social, and Governance (ESG) Sukuk, which are crucial to the country’s green growth strategy. According to Fitch Ratings, the total value of outstanding ESG Sukuk in the UAE reached approximately $9.1 billion by Q3 2024, reflecting a remarkable 43 percent year-on-year growth. Additionally, the UAE’s overall ESG bond portfolio, valued at $13.4 billion, has seen a 59 percent increase year-on-year, with ESG Sukuk making up 40.6 percent of this portfolio.
Growing market share
As of Q3 2024, ESG Sukuk now account for about 15.6 percent of the UAE’s overall Sukuk issuance, up from 12.7 percent the previous year. The UAE also commands a substantial 47 percent share of the Gulf Cooperation Council’s ESG Sukuk market, highlighting its pivotal role in the region. On a global scale, the UAE ranks second only to Malaysia, representing 20.5 percent of all ESG Sukuk issued worldwide and solidifying its status as a key player in sustainable finance.
Commitment to sustainable projects
Furthermore, the UAE has pledged to mobilize AED1 trillion by 2030 to fund sustainable projects, reinforcing its aspiration to emerge as a regional leader in sustainability and innovation. This commitment aligns with a broader strategy for resilience and sustainable economic growth in the face of future challenges, as highlighted by findings from PwC.
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