In pursuit of a sustainable future
Building a more sustainable world together.
As the world recovers from the clutches of the pandemic, we are witnessing a series of global initiatives that are seeking to address and prevent future economic crisis. The recent economic recovery from COVID-19 highlighted the most common priorities of what lies ahead and led to a paradigm shift in how we think about finance and investment. Across the global financial industry, business leaders have become increasingly committed to retaining sustainability at the core of every strategy. With such plans requiring substantial public and private funds, sustainable finance was automatically brought to the forefront.
In the past few years, multiple factors have accelerated the integration of ESG practices in business and government initiatives and advanced the sustainable finance industry globally. Bloomberg Intelligence recently predicted that ESG-related assets are expected to amount to $41 trillion by the end of 2022. Moreover, global assets in sustainable funds grew by 12% to $2.2 trillion in June 2021 as reported by Morningstar.
This shift in global finance reflects the investor demand for ESG integration within businesses, enhanced climate change policies, and an increase in millennials placing greater emphasis on human capital and the environment. Many jurisdictions around the globe are constantly enhancing their ESG-related disclosures and considerations. Abu Dhabi Global Market (ADGM) leads by example in this field, strengthening its focus on the development of normative ESG standards applicable to companies operating within its jurisdiction.
ADGM, the leading international financial centre (IFC) is furthering its regulatory framework for sustainable finance with a focus on governing products and services labelled as sustainable. There is also an increased focus on green taxonomy governance and green-labelled activities in partnership with peer authorities.
Head of Sustainable Finance at ADGM, Mercedes Vela Monserrate, said: “UAE places ESG at the heart of its national vision and became the first GCC country to announce Net Zero by 2050 strategic initiative, to attract inflows from global capital markets as investors increasingly seek ESG compliant investments. ADGM has become the first IFC in the world to be carbon neutral. Its commitment to being a "carbon-neutral” financial services hub aligns with its ongoing efforts to provide an innovative and holistic financial platform and ecosystem that bolsters Abu Dhabi and the UAE’s long-term economic development and sustainable growth. ADGM will continue to collaborate with local and global businesses and play its part in supporting the UAE’s Net Zero commitment”
As the UAE prepares to host COP28 next year, it is intensifying its efforts to increase the implementation and integration of sustainable practices among financial entities and to secure a sustainable economic future for the nation.
Since its inception, ADGM has been a strong advocate of sustainable practices and developed a thriving financial hub to achieve positive economic, social, and environmental objectives. ADGM reinforced its commitment to sustainable practices by aligning with the UAE’s vision through initiatives like the UAE Guiding Principles, Abu Dhabi Sustainable Finance Declaration, and the Abu Dhabi Sustainable Finance Forum. These have contributed to the maturation of Abu Dhabi’s sustainable finance industry and cemented its position as one of the world’s leading locations for sustainable finance deals.
Today’s world needs sustainability at its core. The financial sector is in a unique position to enable this transition as it can provide robust frameworks to ensure businesses mitigate their environmental risks and impacts. The pursuit of a sustainable future must not lose momentum. Creating a more sustainable future requires an all-hands-on-deck approach to bring that shift. Although this shift has started, it must go further and faster to ensure a more sustainable world for generations to come.