In 2023, the Islamic financial institution Abu Dhabi Islamic Bank (ADIB) financed and facilitated a total of AED 5.567 billion in sustainable finance activities, according to its annual Environmental, Social, and Governance (ESG) report.
The bank outlined that this AED 5.567 billion encompassed 14 transactions, with all project financing deals screened using the ESG due diligence toolkit.
This, the bank said, is “fully in line” with the requirements of the Equator Principles.
ADIB also invested AED 1.677 billion in sustainable/green Sukuks.
The report also noted that the bank is “working on setting” a “comprehensive set of targets” for its Scope 3 financed emissions.
These Scope 3 targets will, according to the bank, guide it on strategically channelling financing away from “high-emitting” activities towards low-carbon alternatives.
For most businesses, Scope 3 emissions make up the majority of their emissions. In fact, they typically represent 90 per cent of total emissions.
As outlined in the ESG report, ADIB’s emissions reduction targets span six portfolio sectors, the “highest emitting,” representing 50 per cent of its total exposure:
- Home finance,
- Auto finance,
- Real estate developers,
- Air transport,
- Utilities and
- Petroleum manufacturing.
“Across these sectors, we have decided on production-based carbon intensity targets to be able to measure emissions’ performance and to support customers in their decarbonization efforts,” it said.
For 2023, the bank reported that its total emissions amounted to 13,933 tonnes of CO2e.
On Scope 1, it recorded a “reduction of 65 per cent” compared to the previous year. Scope 2 accounted for 13,310 tonnes of CO2 e).
This 13,933 figure also included total Scope 3 emissions for Category 6, which covers business travel emissions. These are indirect emissions derived from transportation undertaken by employees for business reasons.
Despite often accounting for the majority of company emissions, mandatory Scope 3 reporting remains a contentious issue globally. While it has historically been a voluntary requirement, the tide is now changing, including in Europe under the EU Corporate Sustainability Reporting Directive (CSRD) and in California, US.
Commenting on the report, Mohamed Abdelbary, Acting Chief Executive Officer at ADIB, said: “ADIB’s strategic journey is marked by a steadfast commitment to innovation and sustainability. By integrating robust ESG frameworks into our operations, we are not only enhancing our service offerings but also contributing to the global efforts towards a sustainable future. We are proud of our achievements, ranging from issuing the largest green sukuk by a bank to advancing our Net Zero targets.”