Until recently the world had addressed sustainability independently, with minimal if any effectiveness noticed. Today with the much-needed awareness, we realise that the issue is aptly global and requires unified efforts. Clarity, collaboration, and learning are required to bridge the gap between where we stand and where we should be in terms of our efforts to achieve sustainability.
ESG MENA has recently interviewed Dhaher bin Dhaher Al Mheiri, CEO of Abu Dhabi Global Market (ADGM) and explored with him the efforts put forth by ADGM to develop a global sustainable financial hub in Abu Dhabi, as well as the alignments of those efforts with the UAE’s sustainable goals.
ADGM has drawn a clear map towards creating a globally sustainable finance ecosystem based on four main pillars. The first pillar is about integrating sustainability into the regulatory framework of ADGM. According to Mr. Dhaher, clarity in terms of what constitutes a green project and a green product is needed. He added, “ ADGM published a consultation paper on a proposed comprehensive Sustainable Finance and ESG Regulatory Framework, covering rules on sustainability-orientated investment funds, managed portfolios and bonds as well as a framework on environmental disclosures by ADGM companies. The measures contained in the paper aim to enable accelerated growth of a sustainable finance ecosystem in the jurisdiction and support the UAE’s transition to net zero greenhouse gas emissions.”
The second pillar focuses on collaboration. “ADGM, through its working group on sustainable finance, has actively promoted impactful dialogue with a variety of national and international stakeholders, including authorities, commercial organisations and industry standard-setters. In 2019, we spearheaded the launch of the Abu Dhabi Sustainable Finance Declaration, which gathered important government agencies and corporate champions to collectively commit to supporting the sustainable finance movement.” he further stated.
The third key pillar focuses on fostering communication, knowledge and awareness.
Dhaher believes that greater awareness and acceptance of sustainable development and finance is crucial in mobilising efforts towards the achievement of these goals. This is supported by ADGM’s Abu Dhabi Sustainable Finance Forum, the first event in Abu Dhabi focused on the adoption of sustainable finance in the region, as part of the Abu Dhabi Sustainability Week.
Finally, the fourth pillar focuses on the creation of an ecosystem in ADGM with a diversity of institutions, products and services to deploy financing to scale up sustainable finance.
COP28
The fact that the UAE is hosting COP28 has raised enthusiasm and expedited the efforts towards paving the way to the global most prominent environmental event. Dhaher commented, “we are extremely honoured and excited that the UAE will be hosting COP28 from the 30th of November till the 12th of December at the Dubai expo this year.”
ADGM is currently working not only with the COP28 team but also with different ministries, the signatories of the Abu Dhabi Sustainable Finance Declaration and the UAE Sustainable Finance Working Group (SFWG) which are made up of 10 UAE financial regulators and ministries to promote coordinated approach for sustainable finance ahead of COP28. ADGM achieved that by showcasing specific areas and achievements from key stakeholders.
Carbon-Free Community
ADGM plays a major role in creating a carbon-free community, mainly by providing clarity to the market. Mr. Dhaher highlights that FSRA is the first regulator in the world to develop a framework to support carbon as a commodity and is set to become the first jurisdiction globally to regulate carbon credits and offsets as emission instruments and to issue licenses for exchanges to operate in both spot and derivative markets. ADGM is also launching the regulated digital carbon exchange AirCarbon Exchange (ACX). “With all these efforts and through our upcoming ESG framework and particularly looking at climate transition products that will help achieve net zero commitment, we look to promote and help scale up carbon-free centres not only in Abu Dhabi but also in the UAE in collaboration with other stakeholders, ministries, and regulators,” said Dhaher.