On October 6, 2022, First Abu Dhabi Bank (FAB) brought together some of the world’s brightest minds in climate action when it hosted The Economist Impact’s Countdown to COP27 Summit.
Among these were philanthropist Bill Gates and US Special Presidential Envoy for Climate – John Kerry. They were joined by leading UAE business and environmental figures such as Sheikha Shamma bint Sultan, founder and CEO of Alliances for Global Sustainability; Hana Al Rostamani, group CEO of FAB; and Mohamed Al Ramahi, CEO of Masdar.
In one of the standout moments from the summit, John Kerry outlined his vision as well as his pragmatism for net-zero by telling the audience that: “This is a moment that is unbelievably exciting…this is also an opportunity for big economic transition that will be as big as the Industrial Revolution”.
But Kerry’s vision struck a more realistic tone when he indicated that “the transition to net-zero and the estimated $4tn needed can be achieved ‘only’ with the support of the private sector,” adding that: “There’s barely a government in the world that has money to do this. I believe this very deeply. We don’t get there without the private sector.”
In my view, the banking industry will spearhead that private sector participation which John Kerry spoke of. This is because banks have a unique window into the entire economy, they uniquely touch every sector, and interact with almost every individual.
To date, banks are already facilitating private sector engagement in net-zero, and this will surely deepen and widen in the coming years as the world’s financial institutions play a more profound role in helping corporations walk the talk on their climate ambitions.
To put it more specifically, banks provide strategic advisory and innovative sustainable financing, so they are well positioned to lead the change across the private sector by financing the future direction of energy supply, buildings, transportation, waste, water, and food.
I also believe that COP27 this year will further underscore the power of finance in the road to net-zero.
At FAB, as the UAE’s leading bank, we are stepping up and playing a decisive role in efforts to drive climate action through our proactive engagement and partnerships with our customers, clients, and the UAE government and regulators.
We’re operating across the full breadth of the private sector by working collaboratively with large corporates and SME’s. We’re helping them unlock new possibilities and enabling them to redefine the rules of their engagement with net-zero and the possibilities that it brings.
This involves understanding the diverse and specific needs of private sector entities and tailoring our solutions to best meet their requirements.
A big part of this is strategic investments that are directly linked to sustainable solutions. FAB has been an industry leader in green financing since we issued the region’s first green bond in 2017. But our engagement extends well beyond ‘financing’, as it includes advisory and education in the communities we serve, as well as in measuring market emissions.
At FAB, we’re combining near-term action with a long-term view. In recent memory, we’ve made tangible progress and now we’ve set clear targets in relation to climate action. Around one-year ago, we were the first UAE and regional bank to join the Net-Zero Banking Alliance (NZBA) – in doing so we committed to achieving net-zero by 2050. Alongside this we have set a target of $75bn in green financing for the period 2022-2030.
In addition, we believe that information and disclosure will be crucial to the drive climate action needed to turn ambition into action. Putting these standards in place will prove critical in helping investors assess climate and sustainability risks and opportunities, which in turn will direct capital towards long-term sustainable projects.
To achieve the required systemic change across global economies, we will need the best efforts of individual institutions: we will need coordinated action across the entire public and private sector so that every financial decision takes climate into account especially now that more than 80 per cent of global GDP is covered by a net-zero pledge according to the University of Oxford.
All eyes are now firmly fixed on MENA as it hosts the next two COPs: COP27 in Sharm El-Sheikh, Egypt and COP28 in the UAE. Perhaps now will be the time to turn principles into lasting progress.
At FAB, we’re ready to play our part in turning the environmental crisis into an immense opportunity that will benefit both people and planet alike.
Shargiil Bashir is the chief sustainability officer at First Abu Dhabi Bank