The UAE Ministry of Climate Change and Environment signed a pledge with the financial free zone, Abu Dhabi Global Market, to embed sustainable finance policies in the UAE and wider region. It is part of national commitments to fight climate change.
"We know that climate action makes economic sense, and as we grow our financial services industry here in the UAE, we are determined to do so sustainably," Dr Thani bin Ahmed Al Zeyoudi, UAE Minister of Climate Change and Environment, said on Sunday.
“[With the agreement] we make Abu Dhabi the go-to, natural, professional environment for clean technology and say to potential investors: we are open for conversations about how our frameworks and capacity can support you.”
Mr Al Zeyoudi was speaking to state news agency Wam on the sidelines of the Abu Dhabi Climate Meeting, hosted in collaboration with the United Nations. It was attended by around 1,000 political leaders and climate change experts.
The term "sustainable finance" refers to any form of financial service incorporated into the strategies of businesses or investment decisions intended to yield environmental, social and economic benefits.
The UAE has a climate change action plan — set out in the UAE Green Agenda 2030 and the National Climate Change Plan 2050 — that includes obtaining 50 per cent of the country’s energy needs from clean energy, and reducing emissions from the power sector by 75 per cent by 2050. The country has also invested $1 billion (Dh3.67bn) in aid to developing countries to help fund renewable energy solutions, according to the ministry.
Under the deal with ADGM, the partners pledged to address regulation and funding gaps to attract private investment and pioneering clean technologies to the region.
They also agreed to disseminate information on international sustainable finance to businesses working within the free zone, and to work towards the development of a comprehensive legal framework to govern sustainable finance.
Also at the meeting on Sunday, Dr Al Zeyoudi called on experts from the UAE and beyond to work together to devise solutions to reduce carbon emissions.
"I believe we have a clear opportunity to embark on a new era of economic growth spurred by global, collaborative investment in climate action," he said. "In 2019, climate change is not just about the planet, it is also about people, and we can save lives by eliminating sources of air pollution.
“But, more than that, it is the best investment case we have ever known. Climate change knows no borders, and neither should we.”
He said the UAE is integrating its policies into the management of sovereign assets, through the One Planet Sovereign Wealth Fund Group, set up in 2018.
The group comprises sovereign funds Abu Dhabi Investment Authority, Kuwait Investment Authority, the New Zealand Superannuation Fund, Norges Bank Investment Management of Norway, Saudi Arabia’s Public Investment Fund and Qatar Investment Authority — which collectively manage more than $3 trillion in assets.
The group aims to promote analysis of climate change impacts into the management of large, long-term and diversified asset pools, to foster understanding among investors of the climate-related risks of their investments, and learn how to minimise those risks.