As global financial landscapes shift towards sustainability, the Middle East, led prominently by the UAE, is seizing the momentum.
With net-zero carbon emissions as the overarching goal by mid-century, sustainable finance represents a dual advantage: environmental responsibility and untapped economic potential.
Direct evidence of this shift is visible in the surge of sustainable finance in the Mena region, which touched $24.55 billion in 2021, marking a significant 532 per cent growth from 2020.
Bloomberg’s report on the GCC's green bond and sukuk issuances, which accumulated $8.5 billion from 15 deals last year, further solidifies the region’s active engagement in green finance.
Positioned at the forefront of this transition is the UAE.
Beyond the environmental pledges of the Net Zero 2050 charter, there’s a clear economic blueprint. An earmarked investment of $160 billion towards clean and renewable energy sectors over the coming 30 years signals the UAE's commitment to future-proofing its economy.
Moreover, the strategic goal to source 44 per cent of its energy from clean avenues by 2050 indicates a nation preparing for a green economic boom.
Strategically, the UAE's commitment aligns with global trajectories.
The recently endorsed UAE Energy Strategy 2050 and the National Hydrogen Strategy aren’t mere environmental mandates; they are economic signals, laying out sectors ripe for investment and growth, underlining the nation's alignment with its 2050 targets.
With Cop28 on the horizon, the stakes and opportunities are heightened. This pivotal global event will not only spotlight the UAE's environmental endeavours but will also accentuate its position as an emerging hub for green finance and investment.
For private banks and financial institutions, the climate summit in the UAE offers a prime occasion to gauge, interact with and potentially tap into the flourishing green finance market of the region.
Global implications
As the host of Cop28, the UAE has an exceptional opportunity to shape global financial perspectives on sustainability.
The outcomes of this conference will not only determine environmental policies but also influence global financial flows. Markets, investors and financial institutions will be looking for clear indicators and strategies that merge ecological conservation with economic growth.
The way the UAE navigates this event can set a precedent for how sustainable finance can be effectively leveraged at a global scale.
Digital transformation and green finance
Parallel to the green transition is the undeniable wave of digital transformation, which the financial sector in the Middle East, particularly in the UAE, is undergoing.
Digital platforms, blockchain technology and FinTech innovations are playing crucial roles in shaping green finance's future. Such technology can offer more transparent, efficient and secure means of channelling investment in sustainable projects.
For private banks, understanding and investing in this digital-green nexus could provide a competitive edge, enabling them to offer novel green financial products and services.
Role of private sector innovation
It's worth noting that while government strategies lay the groundwork, the private sector's role in innovating and pushing the boundaries of what's achievable is invaluable.
Private banks and financial institutions are in a unique position to foster innovations in green finance. Through research and development, collaborations with tech firms and partnerships with global financial entities, they can pioneer financial instruments and models that drive sustainable investments at scales previously unimagined.
The resonance between government policy and private sector activity in the UAE is palpable. Numerous UAE-based financial bodies are recalibrating their strategies to be in tandem with the country's sustainable vision. The burgeoning domestic market for green sukuk, bonds and loans epitomises this synchronisation, suggesting robust growth prospects.
The economic ramifications of this green shift are immense. The region could unlock economic growth of up to $2 trillion via sustainable finance initiatives by 2030, accompanied by significant job creation, according to Strategy&. This isn't just about environmental stewardship; it's sound economic foresight.
Yet challenges persist. Ensuring continuous green finance inflows, building sustainable infrastructure and navigating a dynamic regulatory landscape will be paramount.
For entities, especially private banks, understanding these shifts, adapting investment strategies and capitalising on the evolving opportunities, especially in the backdrop of Cop28, will be crucial.
In short, the Middle East's trajectory, especially that of the UAE, towards sustainable finance is more than an environmental pledge, it's a clear economic strategy.
With Cop28 around the corner, the region’s commitment to environmental responsibility and its potential as a beacon for sustainable finance will be on global display.
For astute financial institutions, the message is clear: the green future is not just sustainable, it’s profitable.
Samir Atitallah is chief executive of Mirabaud Middle East
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Day 1
Toss: South Africa, field first
Pakistan (1st innings) 177: Sarfraz 56, Masood 44; Olivier 4-48
South Africa (1st innings) 123-2: Markram 78; Masood 1-4
Brief scores:
Toss: South Africa, chose to field
Pakistan: 177 & 294
South Africa: 431 & 43-1
Man of the Match: Faf du Plessis (South Africa)
Series: South Africa lead three-match series 2-0
Brief scores:
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South Africa (1st innings) 223: Bavuma 53; Amir 4-62
Pakistan (2nd innings) 190: Masood 65, Imam 57; Olivier 5-59
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Starring: Anthony Mackie, Aiysha Hart, Ben Kingsley
Director: Rupert Wyatt
Rating: 3/5
'Champions'
Director: Manuel Calvo
Stars: Yassir Al Saggaf and Fatima Al Banawi
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The worker must also have an attested educational certificate higher than secondary or an equivalent certification, and earn a monthly salary of at least Dh4,000.
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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
What is Folia?
Prince Khaled bin Alwaleed bin Talal's new plant-based menu will launch at Four Seasons hotels in Dubai this November. A desire to cater to people looking for clean, healthy meals beyond green salad is what inspired Prince Khaled and American celebrity chef Matthew Kenney to create Folia. The word means "from the leaves" in Latin, and the exclusive menu offers fine plant-based cuisine across Four Seasons properties in Los Angeles, Bahrain and, soon, Dubai.
Kenney specialises in vegan cuisine and is the founder of Plant Food Wine and 20 other restaurants worldwide. "I’ve always appreciated Matthew’s work," says the Saudi royal. "He has a singular culinary talent and his approach to plant-based dining is prescient and unrivalled. I was a fan of his long before we established our professional relationship."
Folia first launched at The Four Seasons Hotel Los Angeles at Beverly Hills in July 2018. It is available at the poolside Cabana Restaurant and for in-room dining across the property, as well as in its private event space. The food is vibrant and colourful, full of fresh dishes such as the hearts of palm ceviche with California fruit, vegetables and edible flowers; green hearb tacos filled with roasted squash and king oyster barbacoa; and a savoury coconut cream pie with macadamia crust.
In March 2019, the Folia menu reached Gulf shores, as it was introduced at the Four Seasons Hotel Bahrain Bay, where it is served at the Bay View Lounge. Next, on Tuesday, November 1 – also known as World Vegan Day – it will come to the UAE, to the Four Seasons Resort Dubai at Jumeirah Beach and the Four Seasons DIFC, both properties Prince Khaled has spent "considerable time at and love".
There are also plans to take Folia to several more locations throughout the Middle East and Europe.
While health-conscious diners will be attracted to the concept, Prince Khaled is careful to stress Folia is "not meant for a specific subset of customers. It is meant for everyone who wants a culinary experience without the negative impact that eating out so often comes with."
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• Scientists estimate there could be as many as 3 million fungal species globally
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THE BIO
Born: Mukalla, Yemen, 1979
Education: UAE University, Al Ain
Family: Married with two daughters: Asayel, 7, and Sara, 6
Favourite piece of music: Horse Dance by Naseer Shamma
Favourite book: Science and geology
Favourite place to travel to: Washington DC
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