COP28: Landmark Commitment by UAE Banks

At the 28th United Nations Climate Change Conference (COP28), the UAE’s banking and financial sector announced a major initiative: mobilizing over Dh1 trillion ($272.5 billion) in sustainable finance by 2030.

This unprecedented move, led by Khaled Mohamed Balama, Governor of the Central Bank of the UAE, aims to support the UAE’s medium-term economic plans and its Strategy for Net Zero by 2050​​​​.

The focus is on financing the transition and climate adaptation strategies of corporate customers, encompassing carbon-intensive sectors and green projects. This challenge is significant, considering the current economic and sectoral structures of many countries​​.

UAE’s Net Zero Strategy

The UAE’s Net Zero by 2050 strategic initiative aligns with the Paris Agreement. It’s a national drive to achieve net-zero emissions by 2050. It emphasizes the urgency to address climate change’s repercussions for sustainable socio-economic growth globally​​.

Islamic Finance, Innovation in Sustainability

The UAE Central Bank is also guiding Islamic finance institutions in developing sustainable finance strategies. The regulator launched the COP28 UAE TechSprint to accelerate technological solutions for sustainability-related data issues faced by local financial institutions​​.

COP28 and the Financial Sector’s Role

Dr. Sultan Ahmed Al Jaber, Minister of Industry and Advanced Technology and COP28 President, emphasized the financial sector’s crucial role in climate goals. Importantly, the strategic allocation of capital towards environmentally sustainable and climate-resilient investments is essential for maintaining the 1.5°C target.

Additionally, this announcement by UAE banks showcases the nation’s dedication to setting a precedent in tackling sustainability. Consequently, it underscores the UAE’s proactive approach and commitment in this global challenge.

Global Initiatives Announced at COP28

Governments, development banks, and companies at COP28 announced initiatives to mobilize billions in climate finance. The UAE’s ALTÉRRA climate investment venture aims to mobilize $250 billion by 2030, with $5 billion allocated to poorer countries.

The World Bank has committed to increasing its annual spending on climate-related projects to 45% over 2024-2025, up from 35% now. This policy overhaul aims to better respond to climate change, leveraging more private finance at reasonable costs​​.

In a unique mix of public and private funds, the Gates Foundation, UAE, and Bezos Earth Fund initiated the Allied Climate Partners platform. Consequently, it targets $11 billion in investments for developing nations. Moreover, this supports smallholder farmers in Africa and South Africa, who are severely impacted by global warming.

Furthermore, COP28 represents a significant advancement in combating climate change, spearheaded by the UAE’s financial mobilization.

This demonstrates a unified commitment towards a sustainable future. Additionally, it underscores the importance of finance in achieving global climate goals.

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