ESG Update

The UAE Sustainable Finance Working Group, which is chaired by the ADGM and includes numerous federal and local UAE regulators and exchange authorities, such as the Ministry of Finance, the Central Bank of the UAE, NASDAQ Dubai and the DFSA, has issued a High-Level Statement on Sustainable Finance on November 5th, 2021. The Statement outlines the commitment of such various financial regulators and authorities to achieving the UAE’s sustainability goals, including the recently announced Net-Zero 2050 project, which is a national effort to attain net-zero emissions by 2050, making the UAE the first country in the Middle East and North Africa to proceed with such initiative.

*Key deliverables

In a nutshell, the High-Level Statement’s three main key deliverables to which the UAE Sustainable Finance Working Group has committed consist of the following:

 1. To promote and strengthen consistent Environmental Social and Governance corporate disclosure standards across the UAE in line with national and international best practices;

2. To strengthen further corporate governance within UAE companies – by focusing on several topics including but not limited to risk management, stress testing, and data collection – with the aim of improving business models and enhancing both business and sustainability metrics; and

3. To develop a UAE taxonomy of sustainable activities in order to support the flow of capital into sustainable sectors in need of financing while taking into account both international standards and the specific circumstances of the UAE.

Proactive commitment to tackling climate change issues

The announcement of the High-Level Statement came at the time of the occurrence of the 26th United Nations Climate Change Conference (COP26), hosted in Glasgow by the United Kingdom and in partnership with Italy, which has ended on November 12th, 2021, with a new global climate deal being agreed upon among its members.

On another hand, it is noteworthy to highlight that the UAE’s efforts in ensuring its proactive commitment to tackling climate change issues and contributing to the realization of the global sustainable targets aiming at environment protection, has been rewarded through the selection of the UAE as the host of the 28th United Nations Climate Change Conference (COP28) which is expected to take place in 2023.

In fact, it goes without saying that the UAE’s proven track record in climate protection innovations over the past decade as well as its position as the first country in the region to sign and ratify the Paris Agreement as well as its commitment to its Net-Zero 2050 project, as previously defined, played a major role in the selection of the UAE as host of the COP28.

On a final note, it is believed that the current and future efforts invested by the UAE, as well as the attribution of the hosting of the COP28 event to the UAE will play a major impact in the execution of the High-Level Statement’s deliverables through the implementation of legislative and regulatory actions within the respective federal and local UAE regulators and exchange authorities’ respective jurisdictions.

Should you want to know more, please contact Omar

Omar Kayal Associate, Abu Dhabi M +971 55 414 7010 omar.kayal@galadarilaw.com

*Source: The full media release and a copy of the Statement are available via this link: https://bit.ly/30VrHD7