UAEs banking and financial sector will mobilise more than Dh1 trillion in sustainable finance by 2030

During the 28th United Nations Climate Change Conference (COP28) in Dubai on Monday, prominent authorities stated that the banking and financial industry of the United Arab Emirates will raise over Dh1 trillion ($272.5 billion) in sustainable finance by 2030.

The banking industry will need to contribute to both the UAE's medium-term economic ambitions and the Strategy for Net Zero by 2050, according to Khaled Mohamed Balama, Governor of the Central Bank of the UAE. Balama stated that financial institutions have a huge difficulty due to the existing economic and sectoral structure of many nations.

In line with the Paris Agreement, the UAE Net Zero by 2050 strategic plan aims to achieve net-zero emissions by that year. It is urgently necessary to address the effects of climate change in order to achieve sustainable socioeconomic growth in every nation on the planet.

The Global Landscape of Climate Finance 2023 report by Climate Policy Initiative (CPI) states that average annual flows in 2021–2022 were close to $1.3 trillion, which is double what it was in 2019–20.

Large international banks' exposure to climate risk has grown over the last three years, according to Moody's Investors Service, but they still don't provide detailed information on how climate change may impact their financial performance. 

According to Moody's analysts, banks want to supplement their diverse funding sources by actively issuing new climate-focused securities including debt for nature swaps and blue bonds. It projects that worldwide issuance of sustainable bonds will come to $950 billion in 2023, just shy of the $1.1 trillion peak seen in 2021.