Investments by sovereign investors globally into funds and companies following environmental, social and governance standards surged by more than three times last year as government investment arms continued to add sustainability-linked assets to their portfolios.
Investments by sovereign wealth funds in the ESG space surged to $22.7 billion at the end of last year from $7.2bn reported in 2020, according to Finbold.com and data from industry tracker Global SWF.
The number of sustainability-linked investment deals at the end of 2021 also rose to 37 from 19 a year earlier.
Investment in companies and funds tracking sustainable stocks and bonds stood at $5.2bn in 2019. It remained relatively low in the past six years before the jump in 2021, with 2016 recording the lowest value over the period at $3.7bn.
While investments in the ESG space rose, sovereign wealth funds’ capital deployment into oil and gas-related assets declined by 46.92 per cent to $6.9bn, down from $13bn in 2020. Eight oil and gas sector deals were recorded last year, the lowest number of transactions, according to the report.
Sustainable investments and build back better and greener economies have come into sharp focus as the world emerges from the pandemic-driven showdown. It is becoming a central theme for investors who are reshaping their portfolios, cutting down on hydrocarbons investment and seeking yields in greener assets and funds that follow ESG standards.
Sustainability-linked investments are at the heart of the UAE’s sovereign wealth funds’ capital deployments strategies, which are investing tens of billions of dollars domestically across the broader Middle East and North Africa region and elsewhere in the world.
“Like all investors, we are convinced that sustainability is extremely important, which is becoming even more important in the future,” Jean-Paul Villain, director of Abu Dhabi Investment Authority’s strategy and planning department, told the Abu Dhabi Sustainable Finance Forum last year.
Mubadala Investment Company, which bagged the global sovereign wealth fund industry’s top honour and was nominated by Global SWF as the “2021 Fund of the Year”, also lays emphasis on ESG. It is “increasingly material to the performance of our investment both in terms of downside risk and opportunities”, David Crofts, executive director of enterprise risk management and responsible investment at Mubadala Investment Company, said last year.
Saudi Arabia's Public Investment Fund’s governor Yasir Al Rumayyan has also urged the global investment community to capitalise on the "unprecedented opportunity" offered by the Covid-19 pandemic to transform the global economic landscape.
Assets managed by the world’s sovereign wealth funds and public pension funds reached a record high of $31.9 trillion in 2021. Assets held by sovereign wealth funds rose 6 per cent to $10.5tn during the year, while those managed by public pension funds climbed 8.7 per cent to $21.4tn, according to Global SWF's annual report.
Growth of sustainable investing in 2021 indicates that the ESG space has a financial appeal for sovereign wealth funds and can play a crucial role in its growth.
“Last year’s growth indicates that the ESG space has a financial appeal for investors, and SWFs play a crucial role,” Finbold.com cited the latest Global SWF report as saying.
“In general, the SWFs are uniquely positioned to promote the global environmental, ESG agenda and investing in certain products is the first step.”
Like sovereign investors, sustainable investing is also an overriding theme for private and institutional investors and global fund managers. BlackRock, the world’s biggest asset manager, expects sustainability to play an increasing role in how investor portfolios will shape up as ESG becomes an important consideration in investment decisions.
“Sustainable transition has become very central to the way investors are thinking in most regions, whether it is asset managers or the clients we manage money for,” Stephen Cohen, BlackRock’s head of Europe, Middle East and Africa business, told The National in November.
In October, the International Monetary Fund urged the $50tn global investment funds industry to step up efforts to finance the transition to a greener economy and help mitigate the effects of climate change.
Heather, the Totality
Matthew Weiner,
Canongate
Gulf Under 19s final
Dubai College A 50-12 Dubai College B
Skoda Superb Specs
Engine: 2-litre TSI petrol
Power: 190hp
Torque: 320Nm
Price: From Dh147,000
Available: Now
Company Profile
Company name: Fine Diner
Started: March, 2020
Co-founders: Sami Elayan, Saed Elayan and Zaid Azzouka
Based: Dubai
Industry: Technology and food delivery
Initial investment: Dh75,000
Investor: Dtec Startupbootcamp
Future plan: Looking to raise $400,000
Total sales: Over 1,000 deliveries in three months
UAE cricketers abroad
Sid Jhurani is not the first cricketer from the UAE to go to the UK to try his luck.
Rameez Shahzad Played alongside Ben Stokes and Liam Plunkett in Durham while he was studying there. He also played club cricket as an overseas professional, but his time in the UK stunted his UAE career. The batsman went a decade without playing for the national team.
Yodhin Punja The seam bowler was named in the UAE’s extended World Cup squad in 2015 despite being just 15 at the time. He made his senior UAE debut aged 16, and subsequently took up a scholarship at Claremont High School in the south of England.
Our legal consultants
Name: Hassan Mohsen Elhais
Position: legal consultant with Al Rowaad Advocates and Legal Consultants.
Company%20Profile
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The years Ramadan fell in May
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Padmaavat
Director: Sanjay Leela Bhansali
Starring: Ranveer Singh, Deepika Padukone, Shahid Kapoor, Jim Sarbh
3.5/5
RESULTS
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How to help
Send “thenational” to the following numbers or call the hotline on: 0502955999
2289 – Dh10
2252 – Dh 50
6025 – Dh20
6027 – Dh 100
6026 – Dh 200
How to help
Send “thenational” to the following numbers or call the hotline on: 0502955999
2289 – Dh10
2252 – Dh 50
6025 – Dh20
6027 – Dh 100
6026 – Dh 200
Russia's Muslim Heartlands
Dominic Rubin, Oxford
Real estate tokenisation project
Dubai launched the pilot phase of its real estate tokenisation project last month.
The initiative focuses on converting real estate assets into digital tokens recorded on blockchain technology and helps in streamlining the process of buying, selling and investing, the Dubai Land Department said.
Dubai’s real estate tokenisation market is projected to reach Dh60 billion ($16.33 billion) by 2033, representing 7 per cent of the emirate’s total property transactions, according to the DLD.
The five pillars of Islam
1. Fasting
2. Prayer
3. Hajj
4. Shahada
5. Zakat
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How Alia's experiment will help humans get to Mars
Alia’s winning experiment examined how genes might change under the stresses caused by being in space, such as cosmic radiation and microgravity.
Her samples were placed in a machine on board the International Space Station. called a miniPCR thermal cycler, which can copy DNA multiple times.
After the samples were examined on return to Earth, scientists were able to successfully detect changes caused by being in space in the way DNA transmits instructions through proteins and other molecules in living organisms.
Although Alia’s samples were taken from nematode worms, the results have much bigger long term applications, especially for human space flight and long term missions, such as to Mars.
It also means that the first DNA experiments using human genomes can now be carried out on the ISS.
Desert Warrior
Starring: Anthony Mackie, Aiysha Hart, Ben Kingsley
Director: Rupert Wyatt
Rating: 3/5
Marathon results
Men:
1. Titus Ekiru(KEN) 2:06:13
2. Alphonce Simbu(TAN) 2:07:50
3. Reuben Kipyego(KEN) 2:08:25
4. Abel Kirui(KEN) 2:08:46
5. Felix Kemutai(KEN) 2:10:48
Women:
1. Judith Korir(KEN) 2:22:30
2. Eunice Chumba(BHR) 2:26:01
3. Immaculate Chemutai(UGA) 2:28:30
4. Abebech Bekele(ETH) 2:29:43
5. Aleksandra Morozova(RUS) 2:33:01
Red flags
- Promises of high, fixed or 'guaranteed' returns.
- Unregulated structured products or complex investments often used to bypass traditional safeguards.
- Lack of clear information, vague language, no access to audited financials.
- Overseas companies targeting investors in other jurisdictions - this can make legal recovery difficult.
- Hard-selling tactics - creating urgency, offering 'exclusive' deals.
Courtesy: Carol Glynn, founder of Conscious Finance Coaching
Paatal Lok season two
Directors: Avinash Arun, Prosit Roy
Stars: Jaideep Ahlawat, Ishwak Singh, Lc Sekhose, Merenla Imsong
Rating: 4.5/5
Ten tax points to be aware of in 2026
1. Domestic VAT refund amendments: request your refund within five years
If a business does not apply for the refund on time, they lose their credit.
2. E-invoicing in the UAE
Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption.
3. More tax audits
Tax authorities are increasingly using data already available across multiple filings to identify audit risks.
4. More beneficial VAT and excise tax penalty regime
Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.
5. Greater emphasis on statutory audit
There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.
6. Further transfer pricing enforcement
Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes.
7. Limited time periods for audits
Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion.
8. Pillar 2 implementation
Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.
9. Reduced compliance obligations for imported goods and services
Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations.
10. Substance and CbC reporting focus
Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity.
Contributed by Thomas Vanhee and Hend Rashwan, Aurifer
Eyasses squad
Charlie Preston (captain) – goal shooter/ goalkeeper (Dubai College)
Arushi Holt (vice-captain) – wing defence / centre (Jumeriah English Speaking School)
Olivia Petricola (vice-captain) – centre / wing attack (Dubai English Speaking College)
Isabel Affley – goalkeeper / goal defence (Dubai English Speaking College)
Jemma Eley – goal attack / wing attack (Dubai College)
Alana Farrell-Morton – centre / wing / defence / wing attack (Nord Anglia International School)
Molly Fuller – goal attack / wing attack (Dubai College)
Caitlin Gowdy – goal defence / wing defence (Dubai English Speaking College)
Noorulain Hussain – goal defence / wing defence (Dubai College)
Zahra Hussain-Gillani – goal defence / goalkeeper (British School Al Khubairat)
Claire Janssen – goal shooter / goal attack (Jumeriah English Speaking School)
Eliza Petricola – wing attack / centre (Dubai English Speaking College)
