UAE Focus

Our detailed study of the views on sustainable financing and investing of 180 issuers and investors shows that participants on both sides of the market are responding to environmental threats and to inequalities in society.

Executive Summary
  • In 2020, only 58 per cent of UAE investors say they see obstacles to ESG investing, a significant drop from the 77 per cent who agreed with this in the 2019 Global Survey.
  • 91 per cent of issuers expect to be reallocating capital towards positive environmental and social outcomes to a substantial or noticeable extent in the next five years.
  • Both issuers and investors want clearer data and guidance around ESG principles.
  • UAE market participants see clear opportunities in electric vehicles and charging, and carbon capture.

 

Key Findings

 

From building prototype green cities1 to investing in clean energy2, the United Arab Emirates has made a clear commitment to sustainability for its future. In 2015, the government implemented the UAE Green Agenda 2015-2030, an ambitious strategy to transition to a low-carbon green economy in 15 years. This was swiftly followed by the National Climate Change Plan 2050, adopted in 2017 as a framework for climate change mitigation and adaptation and a roadmap for its Paris Agreement commitments.

The UAE Energy Plan 2050, announced earlier the same year, aims to increase the share of clean energy in the country’s energy mix to 50 per cent by 2050, with 44 per cent generated from renewable sources. The strategy also hopes to cut the nation’s power generation carbon footprint by 70 per cent in the same timeframe and reduce residential energy consumption by 40 per cent.

This strong official leadership in sustainability is clearly felt across industries in the UAE, including finance. Our survey of 180 issuers and investors shows that commitment to sustainability is strongly felt and challenges in pursuing Environmental, Social and Governance (ESG) investment are beginning to fall away. There is no doubt that both issuers and investors are deeply concerned with the impacts of climate change and hope to change the economy’s reliance on fossil fuels. However, after a difficult 2020, investors are concerned about risk, despite the opportunities they also acknowledge. Read more

1 Masdar City https://masdar.ae/en/masdar-city/the-city
2 “UAE to double renewable energy portfolio in next ten years: ADNOC” Reuters, January 13, 2020 https://uk.reuters.com/article/us-emirates-energy/uae-to-double-renewable-energy-portfolio-in-next-ten-years-adnoc-idUKKBN1ZC0IB

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