UAE financial markets undergoing sustainability driven transformation

Nadim Najjar, Managing Director, Central & Eastern Europe, Middle East & Africa (CEEMA), for the London Stock Exchange Group (LSEG), asserted that UAE financial markets are undergoing a remarkable transformation. This shift is driven by global and regional trends, particularly in the crucial area of sustainability.

In a statement to Emirates News Agency (WAM), Najjar emphasised the UAE’s vital commitment to directing substantial capital towards achieving net-zero emissions.

He commended the country’s leadership role in this critical field, acknowledging its immense importance in securing climate objectives.

Najjar underscored the UAE’s successful positioning as a prominent player in developing a fully regulated carbon market. This achievement is marked by the comprehensive integration of carbon within the regulatory framework.

He explained that this allows the UAE to effectively manage and trade carbon, offering companies valuable tools to reduce their carbon footprint and manage emissions.

“This initiative not only bolsters responsible corporate practices,” Najjar stated, “but also equips investors with the necessary information to make informed and sustainable investment decisions.”

Najjar pointed out that the UAE’s multifaceted sustainability efforts, coupled with its unwavering focus on innovation and technology, and its established reputation as an entrepreneurial hub, position it exceptionally well to champion innovation and drive sustainable solutions.

He commended the inclusive approach of the UAE’s COP28 Presidency, which actively engaged a diverse range of stakeholders. This collaborative effort, he noted, played a pivotal role in facilitating the exchange of ideas and perspectives, which is vital for accelerating progress towards achieving Sustainable Development Goals (SDGs) and solidifying the UAE’s commitment to creating a sustainable future.

Najjar highlighted the collaborative project with the Abu Dhabi Securities Exchange (ADX) through the launch of the ESG (Environmental, Social, and Governance) benchmark index last November.

He described this partnership as a strategic alliance aimed at revolutionising the financial landscape.

He mentioned that the partnership with ADX began in 2021 to craft a suite of indices that not only keeps pace with evolving investor needs but surpasses them, both locally and internationally.

“At the heart of our work lies the commitment to providing market participants with reliable, accurate, and, most importantly, transparent indices. This transparency is fundamental to fostering investor confidence and nurturing a healthier, more sustainable financial ecosystem.”

He emphasised that the launch of the first ESG index in collaboration with ADX signifies a major milestone. This index transcends being merely a benchmark; it symbolises a collective commitment to sustainability.

It addresses the growing demand for investments aligned with ESG values, echoing the global shift towards responsible investing.

This index responds to the critical need for more sustainable financial markets, where sustainability has become paramount for both investors and companies.

He added that partnering with the ADX has been a significant step towards building a platform that empowers investors to make responsible choices, contributing to a more sustainable future for all.

He further stated that this index serves as a powerful tool for investors, offering a reliable standard to assess company performance within the Abu Dhabi market, with a particular focus on environmental, social, and corporate governance criteria. It facilitates aligning investment objectives with values by enabling investments in companies committed to environmental sustainability, social responsibility, and robust corporate governance practices.

“This empowers investors to direct their capital towards companies actively shaping a sustainable future, thereby driving positive change within financial markets,” he noted.

Najjar further highlighted the index’s role in encouraging institutions to disclose environmental, social, and corporate governance information.

This promotes greater accountability, aiding in the identification of potential risks and opportunities.

“Our partnership with the ADX transcends mere collaboration; it’s a strategic alliance forged on a shared commitment to sustainability. This commitment is further exemplified by the market’s active participation in the United Nations-led Sustainable Stock Exchanges initiative,” he said.

WAM