Esg and surroundings

Sustainable finance, big steps forward in the Middle East and North Africa

Emirates Nbd first bank in the region to publish green reports with international standards. Esg results also in other countries

by Andrea Curiat

13 April 2025

4' min read

Key points

Esg results
Esg finance in the Middle East: the pulse of the situation
Local initiatives
The road to sustainability

4' min read

Emirates Nbd is the first bank in the Middle East, North Africa and Turkey (Menat) region to publish a sustainability report in line with International Sustainability Standards Board (Issb) Ifrs S1 and S2 international standards. The Ifrs criteria were launched in June 2023 with the aim of fostering greater uniformity and transparency, globally, in the financial reporting of capital markets. The adherence by Emirates Nbd, one of the most important banks in the United Arab Emirates, represents a first but significant step towards the sustainability of the financial sector in the Menat region.

Esg results

In detail, the Issb report released by Nbd includes specific disclosures on sustainability-related risks and opportunities, meeting Ifrs S1 standards; and the climate change transparency requirements of S2. Among the ESG achievements highlighted in the report are the raising in 2024 of $2.25 billion in funds to finance the energy transition in global capital markets, a 15% reduction in Scope 1 & 2 emissions in the Uae compared to 2023, and 18% of women in peer leadership positions.

Future goals include achieving net zero by 2050; allocating $30 billion for sustainable finance by 2030; and increasing the proportion of women managers to 25 per cent by 2027. "We are proud to be the first bank in the Menat region to publish the inaugural report meeting Issb standards, paving the way in sustainability reporting," commented Vijay Bains, cfo of Emirates Nbd.

Esg Finance in the Middle East: the pulse of the situation

While the EU stays the course and the US pulls the brakes, what is the state of sustainability in the Middle East financial industry? Some data emerges from Ernst & Young's 2024 report, which tracks the collective progress of MENA banks in terms of ESG practices. This shows that, by the end of 2023, 70% of banks in the Menat had published sustainability plans and strategies, with 20% of institutions leading the way in terms of actual performance. However, good intentions are not always supported by a structure capable of implementing them effectively. Forty-five per cent of the banks surveyed by Ey lacked an ESG committee or commission at any level; only one in three had appointed a chief sustainability officer; and even fewer, one in five (20 per cent), offered incentives and bonuses to managers that were also linked to ESG goals in addition to normal business performance.

More concrete is the intervention of credit institutions in the local economy.70% of banks provide loans for renewable energy projects, 65% issue green bonds and the like, and 45% offer sustainability-related loans. The real weak point lies in the mitigation of climate change risks. More than 80% of the banks surveyed by Ey have no policy or declaration of intent on this specific front.

Local initiatives

In some Menat states, financial sector regulation is moving to support greater transparency on the sustainability front. In Bahrain, the government has pledged to meet the UN Sustainable Development Goals (SDGs), and to reduce CO2 emissions by a third by 20230 (net zero is still a long way off for the economy, which is heavily dependent on oil and gas production, and is set for 2060). As part of this openness to ESG practices, from December 2024 all banks, insurance companies and other financial companies have to comply with new ESG reporting requirements.

In October 2024, the Partnership for carbon accounting financials (Pcaf) expanded to Mena, with a new local division co-chaired by Emirates Nbd and First Abu Dhabi Bank. The aim is to stimulate collaboration with nine other institutions in the region that have joined Pcaf, to improve communication and disclosure on financial sector emissions.

In Egypt, in line with Vision 2023 and the UN sustainability goals, banks launched 24 financing programmes in the environmental and social sectors; the local banking sector adhered to the Principles for Responsible Banking, issued by the UN Environment Programme Finance Initiative (UNEP Fi), with the aim of aligning local strategies with the SDG sustainability goals. The efforts earned an improved rating for Egypt by the Sustainable banking and finance network, part of the World Bank Group.

The Road to Sustainability

The road to sustainability in the Middle East and neighbouring regions is still a long one, but progress in the financial sector seems concrete. The Menat is one of the regions in the world most exposed to climate risks: a World Bank working paper published in March estimates that, by 2050, the region could be forced to import up to 50 per cent of the water needed to meet the needs of its population. The populations in the region are exposed to a 'triple threat', according to the study: air pollution, severe drought, and extreme heat. Each of these could worsen with the effects of climate change, disproportionately affecting the very poorest segment of the population - in a region where, the study points out, 40% of the inhabitants live below the poverty line.

Menat's banks and other financial institutions could play a key role not only in financing the energy transition, but also in helping the population with the hardships described by the report. Increased transparency and reporting in accordance with international standards is a fundamental (though by itself not sufficient) step in laying the foundations for a more active, reliable and committed financial system in the indispensable business of financing the energy transition.