Adib mobilises AED17 billion in sustainable finance, accelerating UAE’s net zero goals

Abu Dhabi Islamic Bank (ADIB) has recorded a significant milestone in sustainable finance, mobilising AED17 billion ($4.7 billion) by the end of 2024. This achievement represents strong progress towards its ambitious AED60 billion target set for 2030, reinforcing its prominent role in advancing ethical and climate-conscious finance within the region.

The progress is detailed in ADIB’s 2024 Sustainability Report, which highlights strategic advances across environmental, social, and governance (ESG) pillars. These efforts are closely aligned with key national frameworks, including the UAE Net Zero 2050 strategy and the UAE Vision 2031, illustrating the bank’s commitment to supporting the country’s climate and economic objectives. The report also features ADIB’s pioneering move as the first Islamic bank in the region to release sector-specific financed emissions targets covering six high-emission sectors such as real estate, utilities, and home finance. These targets are aligned with International Energy Agency (IEA) Net Zero scenarios as well as the UAE’s broader decarbonisation roadmap, underscoring a clear pathway toward reducing the carbon footprint of its financed activities.

In a move to enhance transparency and international standard alignment, ADIB conducted a double materiality assessment under the European Sustainability Reporting Standards (ESRS). This comprehensive evaluation identified key impacts, risks, and opportunities across environmental, social, and governance dimensions, ensuring the bank understands both how sustainability factors affect its business and how its operations influence wider ecological and social systems.

One of the striking features of ADIB’s sustainability agenda is its issuance of a $500 million Green Sukuk, with the latest allocation and impact report revealing that 90% of the proceeds have been channelled into renewable energy, energy efficiency, and sustainable water infrastructure projects. These investments are anticipated to prevent over 607,000 tonnes of carbon emissions annually, making a substantial contribution to climate mitigation efforts. Furthermore, ADIB’s operational sustainability has seen noteworthy improvements with an 87% reduction in Scope 1 emissions compared to 2022 and a 3.51% decrease in Scope 2 emissions. These reductions are credited to enhanced energy efficiency measures, electrification initiatives, and operational optimisation throughout the ADIB group.

Commenting on these developments, Mohamed Abdelbary, ADIB’s Group Chief Executive Officer, emphasised: “Putting sustainability at the heart of what we do is one of the three key pillars of our 2035 vision. We’re proud of the progress we’re making, and how we’re using our financing to contribute to the transition of our customers and the economy. From leading the region in green sukuk to setting the benchmark on sectoral decarbonisation, we are taking decisive steps toward a low-carbon future.” He also stressed the significance of the double materiality assessment, saying it ensures credible, decision-useful disclosure and enhances understanding of how the bank’s business impacts and is impacted by sustainability factors.

On the social front, ADIB reported strong strides in its social responsibility commitments, particularly in terms of Emiratisation. The bank’s UAE national employment rate has reached 44%, with women comprising 72% of new UAE national hires and accounting for 39% of the overall workforce. These figures align closely with national inclusion and diversity objectives, reinforcing ADIB’s role in fostering an equitable workplace.

Notably, ADIB’s leadership in sustainable banking has been validated by external recognition. For the third consecutive year, the bank was named the world’s Safest Islamic Bank by Global Finance Magazine in 2024. It was also honoured as the Best Islamic Bank in the UAE and Egypt and received the global accolade for Best Islamic Bank in ESG. These awards underscore the bank’s strong regional influence, financial solidity, and its pioneering commitment to sustainable and ethical finance.

ADIB’s efforts come amid a broader push within the UAE toward sustainable finance, as other entities such as Etihad Rail have similarly launched frameworks aimed at aligning infrastructure investments with ESG targets and the national goal of net zero emissions by 2050. This collective momentum highlights the UAE’s increasingly prominent role in the global green finance landscape.

While the bank’s sustainable finance portfolio has grown rapidly in recent years, from AED5.567 billion in 2023 to the current AED17 billion mobilisation, it continues to advance towards its longer-term goals with additional focus on reducing its direct emissions footprint. ADIB’s sector-specific emissions targets and transparent reporting practices contribute to a credible and accountable path forward, aligning Islamic finance principles with cutting-edge sustainability standards.

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Source: Noah Wire Services