The UAE: Leading the global climate transition

In the relentless fight against the global climate crisis, the UAE is making remarkable strides towards a sustainable future.

With a wealth of ambitious goals, substantial investments, and an unwavering commitment to address climate change, the UAE is carving its niche as a trailblazer in addressing worldwide transition.

Gearing up for COP 28

The UAE was the “first country in the Middle East to sign and ratify the Paris Agreement, and the first in the region to announce a Net Zero by 2050 Strategic Initiative.”

Now the Emirate will play a pivotal role in global climate negotiations by hosting COP 28 in November 2023.

This milestone event grants the UAE a unique opportunity to not only exhibit its dedication to sustainability but to also collaborate with international partners in shaping its climate policy.

The UAE has also dedicated 2023 as the ‘Year of Sustainability’. His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, approved a total of 78 environmental initiatives which fall alongside key sustainability strategies such as: UAE Vision 2021, the UAE Centennial 2071, and the UAE Energy Strategy 2050.

Investing in transition: Renewable energy & green technology

The UAE has invested heavily in renewable energy and green technology projects fostering innovation in areas like energy storage, electric mobility, and water desalination.

In order to meet its commitment of providing 75% of Dubai’s energy from clean sources by 2050 the UAE has nuclear power plants to help diversify its energy sources and is home to the world's largest single-site solar energy project, the Mohammed bin Rashid Al Maktoum Solar Park, set to provide clean energy to hundreds of thousands of homes.

The Abu Dhabi Investment Authority (ADIA), one of the world's largest sovereign wealth funds, is actively steering investments into renewable energy and clean tech on a global scale. ADIA has allocated over $1 billion towards renewable energy projects across multiple countries.

Sustainable financing: Fueling the green revolution

Sustainable financing is the linchpin of the UAE's transition to a greener economy. The nation has witnessed a remarkable surge in green financing mechanisms, with green bonds and green loans playing a pivotal role. These financial instruments channel funds into projects with demonstrable environmental benefits, such as renewable energy development and sustainable infrastructure.

As of 2023, the issuance of green bonds in the UAE has surged to an impressive $31.5 billion, marking a substantial increase from previous years.

Moreover, the UAE government continues to actively support green finance initiatives by launching programs that promote sustainable practices among financial institutions.

According to S&P Global, “The UAE could shine a light on the opportunities offered by Islamic finance and sukuk to finance initiatives related to the climate transition. The introduction of sustainable finance-linked Islamic instruments could add further depth to the investor base.”

Embedding ESG into the UAE business strategies

Many businesses have recognized that sustainable practices not only mitigate risks but also create opportunities for growth.

According to PwC, “Heightened awareness of climate risk to business, coupled with new regulation, has driven the embedding of ESG into the strategy of more than six in ten companies in the Middle East region, with the focus now increasingly shifting to execution.”

In the UAE we are seeing corporates making landmark investments, such as Emirates who announced it has committed US$200 million to fund research and development projects focused on reducing the impact of fossil fuels in commercial aviation, this is the biggest single commitment by any airline on sustainability.

Overall, in a world grappling with the urgent need to combat climate change and transition to sustainable energy sources, the UAE stands as a beacon of innovation and unwavering determination.

With COP 28 on the horizon, the UAE is poised to lead the charge on the global stage. Its substantial investments in sustainability, flourishing renewable energy sector, increasing commitments to sustainable financing, and the adoption of ESG principles in business strategies, all attest to the nation's steadfast resolve to forge a greener, more sustainable future.