Steps Forward in Sustainable Finance Accelerate in the Middle East and North Africa Region
The Middle East, North Africa, and Turkey (MENAT) region is witnessing a significant shift in Environmental, Social, and Governance (ESG) finance, with regulatory frameworks and market opportunities driving this transformation. The UAE and Saudi Arabia are at the forefront of this change, making ESG compliance a key part of their business strategies.
In a notable move, Emirates NBD, a leading bank in the United Arab Emirates, has published a sustainability report, making it the first bank in the MENAT region to do so. This report aligns with the International Sustainability Standards Board (ISSB) criteria, which aim to promote greater uniformity and transparency in global financial market disclosures.
According to the 2024 report by Ernst & Young, 18% of women hold leadership roles at Emirates NBD, and the bank aims to increase this proportion to 25% by 2027. The bank has also collected $2.25 billion in funds in 2024 to finance the energy transition on global capital markets.
The publication of Emirates NBD's sustainability report represents a significant step forward for financial sustainability in the MENAT region. Given the UAE's new climate regulations and strong push for ESG, banks like Emirates NBD are increasingly expected to adopt rigorous ESG reporting and embed sustainability into their operations and financing activities.
The report likely reflects the regulatory-driven transition from ESG as a voluntary practice to a necessary component of risk management and competitive differentiation. Comparable MENAT banks are likely following similar paths, leveraging ESG frameworks to unlock investment, support sustainable urban development, and improve transparency, supported by digital innovations in ESG reporting and compliance.
Emirates NBD has already achieved a 15% reduction in Scope 1 & 2 emissions in the UAE compared to 2023. The bank aims to allocate $30 billion for sustainable finance by 2030 and aims to achieve net zero by 2050.
However, the report does not provide explicit details on direct comparisons with other MENAT banks. It can be inferred that Emirates NBD, as a leading regional bank, aligns with the broader regional shift towards ESG integration driven by regulatory frameworks and market opportunities.
The IFRS criteria, issued by the International Sustainability Standards Board in June 2023, are standards for sustainability reporting. While 70% of MENAT banks had published sustainability plans and strategies by the end of 2023, 45% of the banks surveyed by EY lacked an ESG committee or commission at any level. Only one in three MENAT banks had appointed a chief sustainability officer, according to the same report.
The accelerating trend towards ESG finance in the MENAT region is indicative of a broader global shift towards sustainable business practices. Forums and events like the Sustainability Forum Middle East 2025 emphasize private sector climate action and the acceleration of decarbonization efforts, indicating growing regional momentum toward sustainability.
Digital innovation is playing a crucial role in improving ESG execution, with initiatives in Dubai leveraging technology for better ESG reporting, data integrity, and compliance. This trend of integrating digital tools with sustainability strategies is likely to continue, further enhancing the transparency and effectiveness of ESG reporting in the region.
In conclusion, ESG finance in the MENAT region is moving decisively towards regulation-driven integration and market opportunity, with Emirates NBD leading the way. The UAE’s new climate law is catalyzing private sector and financial institutions to adopt comprehensive ESG frameworks, reflecting the transition from ESG compliance to strategic value creation, consistent with other leading banks and financial institutions in the Middle East.
- The financial sector in the MENAT region, led by Emirates NBD, is using ESG (Environmental, Social, and Governance) frameworks to unlock investment, support sustainable urban development, and improve transparency.
- In line with the International Sustainability Standards Board (ISSB), banks like Emirates NBD are shifting ESG from a voluntary practice to a necessary component of risk management and competitive differentiation.
- The focus on climate-change and environmental-science is driving the growth of financial science in the MENAT region, with businesses incorporating ESG strategies to align with regulatory frameworks and global sustainability standards.
