UAE boosts its leadership across green finance

The UAE has strengthened its global leadership in green finance and sustainable development, rolling out strategic policies to boost investment in sustainable projects and promote innovation in the sector. The country is recognised as a regional model in the Middle East for its regulatory framework supporting green finance, enhancing its position as a global hub for sustainable investment and attracting international capital.

Bashar Al Natoor, Global Head of Islamic Finance and Managing Director at Fitch Ratings, highlighted the UAE’s progress in Environmental, Social, and Governance (ESG) sukuk, a vital part of the country’s green growth strategy. According to Fitch Ratings, the value of outstanding ESG sukuk in the UAE reached approximately $9.1 billion by Q3 2024, representing a 43 per cent year-on-year (YoY) growth. Furthermore, the UAE’s total ESG bond portfolio, valued at $13.4 billion, reflects a 59 per cent YoY increase, with ESG sukuk forming 40.6 per cent of this portfolio. ESG sukuk now constitute around 15.6 per cent of the UAE’s overall sukuk issuance as of Q3 2024, up from 12.7 per cent YoY. The UAE also holds a significant 47 per cent share of the Gulf Cooperation Council countries’ ESG sukuk market, underscoring its leading role within the region. Globally, the UAE ranks second after Malaysia, accounting for 20.5 per cent of all ESG sukuk worldwide, reaffirming its role as a key player in sustainable finance.

Moreover, the UAE has committed to mobilising Dhs1 trillion by 2030 to finance sustainable projects, supporting its vision to become a regional leader in sustainability and innovation.

WAM