Sustainable Financing and Investing Survey – Middle East

Changes in attitude towards green infrastructure, social welfare and sustainable finance are taking place in the Middle East, North Africa and Turkey (MENAT) region, according to HSBC’s survey of capital markets issuers and investors on ESG.

Overview

Executive Summary
  • ESG factors are growing in importance across the Middle East region, with 93 per cent of issuers and 65 per cent of investors citing the benefits of incorporating them.
  • Social welfare in the region has been brought into focus as a result of the COVID-19 pandemic.
  • The region is seeing greater engagement with sustainable finance with 2 in 3 investors saying social issues specifically are more important than before.
  • Reporting alignment to SDGs is high in the region.

 

Key Findings

 

While the economies that make up the Middle East, North Africa and Turkey (MENAT) region remain varied, one common area of focus is the pursuit of diversification and low-carbon economies. Today, the region is shifting towards investing in renewable energies, launching green bonds and other green financing initiatives, with a view to enabling higher levels of green solutions across a wide range of sectors.

Our survey of 2,000 capital markets issuers and investors shows that in the Middle East region there is a move amongst investors to pursue firm-wide policies on responsible investing or ESG factors. 41 per cent cited this intention – the highest amongst all the regions surveyed.

A large majority of issuers – 93 per cent – cite environmental and social issues as important to them, a sign of the growing awareness of the benefits of incorporating ESG factors. Yet this figure is markedly lower for investors, with just 65 per cent agreeing.

Engagement with some issues, such as the UN Sustainable Development Goals (SDGs) — is high in the region. Issuers and investors also adhere strongly to core values, while the COVID-19 pandemic has clearly strengthened interest in sustainable finance.

In the Middle East, a 2019 study showed that ESG uptake was already on the rise. And as in other regions, the global COVID-19 pandemic has further accelerated engagement with ESG issues. The survey found that an above average proportion of issuers – 44 per cent versus the 41 per cent global average – and investors – 30 per cent versus 29 per cent – now believe more strongly than before in the importance of becoming sustainable or considering ESG issues in investing. Read more

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