Against the backdrop of an
international health crisis, and one of the largest vaccine rollouts in
history, the third edition of the Abu Dhabi Sustainable Finance Forum (ADSFF)
was held virtually on 20 January, 2021, as part of the larger Abu Dhabi Sustainability
Week.
In a chapter of history forever
defined by both Covid-19 and climate change, investors, financial
institutions, government representatives and NGOs gathered to address key
developments in sustainable finance, specifically how to rebuild global
economies through a sustainable, resilient and equitable approach.
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Key speakers included:
H.E. Ahmed Al Sayegh, Minister of State,
UAE and Chairman of Abu Dhabi Global Market;
Mairead McGuinness, European Commissioner for Financial Stability,
Financial Services and the Capital Markets Union, European Commission
in
addition to representatives from Luxemburg, Egypt and the United Kingdom.
Here are the five top takeaways from
the event:
1. Low carbon economies is a common goal
Antoine Sire, Head of BNP Paribas
Group Engagement, was joined by industry peers from Allianz, HSBC and Amundi
on a panel entitled, “Financial Roadmap to Net Zero – Reality Now or Long-Term
Ambition?”
A pragmatic approach based on
sustained progress and implementation of industry wide common standards was
highlighted throughout the panel. Finance was recognised as a core enabler of
transformation and an important pre-requisite to meaningfully address climate
change.
Antoine Sire, Head of BNP Paribas Group Engagement
During his address, Antoine Sire
explained BNP Paribas’ commitment to the Paris Agreement which set the course
to achieving carbon neutrality by 2050 to limit the global temperature
increase to well below two degrees. Panellists also acknowledged the
complexities faced by certain sectors on their sustainability journey, a point
Antoine explained by stating: “Innovation is critical for finance to support
the low-carbon economy transition, and being at the forefront of new financing
techniques.”
Elsewhere during the forum,
international airline Etihad announced it had begun to tackle its carbon
emissions, declaring an intent to achieve a minimum target of zero net carbon
emissions by 2050 and to halve of its 2019 net emission levels by 2035. A
methodical approach including carbon off-setting, latest-generation
fuel-efficient aircraft and biofuel development was explained as part of the
strategy.
2. A commitment to Sustainable Finance for the growth of the economy
Five new signatories were added to
the Abu Dhabi Sustainable Finance Declaration, affirming their
commitment to advancing the UAE’s sustainability agenda. Blackrock, Crédit
Agricole, Invesco, Clean Energy Business Council, in addition to the first
non-governmental organisation (NGO), the Emirates Nature WWF joined the
expanding network this year.
Forty-one public and private sector
participants have now signed the framework to foster positive economic, social
and environmental initiatives, and advocate for sustainable finance
investments for the long-term well-being and growth of the economy.
3. Innovative bonds for social impact – a focus on disability
The Middle East’s first Social Impact
Bond was issued in the UAE to support the training and employment of people
with physical and learning disabilities. The bond aims to create measurable
social outcomes or ‘pay-for-success’ contracts between the public and private
sector, bringing organisations together to solve collective social challenges.
Key objectives are to increase the employability skills and opportunities of people of determination.
“We have to focus our efforts on financing companies that align to a sustainable future themselves and are on a transition journey. This shift will take pragmatism, innovation, client engagement, and partnerships across various stakeholders.”
The growing demand for ESG disclosure
was widely discussed throughout the forum by key stakeholders including Mark
Carney, UN Special Envoy for Climate Action and Finance and UK Prime
Minister’s Finance Adviser for COP 26.
In advance of this growing mandate,
Abu Dhabi Global Market (ADGM) announced their ‘Sustainability Excellence,
ADGM Sustainable Finance Platform’, a newly developed ESG performance tool
designed to capture sustainable finance activity in the region. Using ADGM
signatory companies including BNP Paribas, organisations are assessed by the
platform according to 25 key performance indicators which are based on
publicly available data, including sustainable finance products both developed
and in the pipeline.
5. Strategic Partnerships are fundamental to success
In order to tackle the climate
crisis, mobilising knowledge across not only the finance industry, but
research, science and society emerged as a key theme of the forum. A number of
strategic partnerships and coalitions were announced at the event including a
new sustainable financing framework between the UAE Ministry for Climate
Change and Environment and local regulator ADGM. This type of partnership
embeds climate change as the heart of developments in sustainable finance, as
banks have an integral role in supporting corporates, investors, individuals
and broader society in moving towards a carbon neutral world by mid-century.
Suggested reading
What we learnt at the Abu Dhabi Sustainable Finance Future Forum