The new framework covers rules on sustainability-orientated investment funds, managed portfolios and bonds as well as requirements for environmental, social and governance (ESG) disclosures by ADGM companies.
New measures will aim to accelerate the growth of a sustainable finance ecosystem in the region and support the UAE’s transition to net zero greenhouse gas emissions.
Aligning with ADGM’s focus on stakeholder engagement, a feedback statement has also been issued that reflects on the meaningful feedback received and addresses the key issues raised in response to the consultation paper and through associated stakeholder engagements.
The support for its proposals from the industry, including stakeholders who indicated their plans to launch products under the proposed framework, ensured ADGM followed through with the comprehensive sustainable finance framework.
Dr Sultan Al Jaber, president-designate of COP28 UAE, said: “I warmly welcome ADGM’s regulatory framework for sustainable finance. The lack of available, accessible, affordable finance is putting the world’s climate goals and sustainable development at risk and addressing this issue is one of the top priorities of the COP28 Presidency. To make transformational progress, we need to shift gears in mobilising private finance.
“ADGM endeavours in advancing such a crucial initiative and in establishing a global hub for sustainable finance are highly commendable. This initiative will play a vital role in mobilising capital for the transition to net zero not only in the UAE, but also in EMDEs, and will enable increased green transactions from local and global financial institutions.
“I also welcome the ongoing work of the Sustainable Finance Working Group, chaired by ADGM and composed of UAE regulatory authorities, Federal Ministries and exchanges. These initiatives encompass joint efforts to advance frameworks for ESG disclosures, measures to require sustainability-focused corporate governance and the development of a UAE green taxonomy.
“Finance is the key to turn good intentions into real results. The Paris Climate Agreement set our collective ambition, and we need initiatives such as ADGM’s Sustainable Finance Regulatory Framework to help us keep 1.5C within reach.”
Jasim Al Zaabi, chairman of Abu Dhabi Global Market, said: “In the year that the UAE is hosting COP28, ADGM proudly aligns its actions with those of the country’s leadership who have declared this year as the Year of Sustainability. We believe our regulatory framework for sustainable finance is the most comprehensive in the Middle East and South Asia region, and comparable in scope and content with the most comprehensive regulatory frameworks globally.”
“Our requirements, particularly those which set minimum standards for sustainability-focused products and services, will help to channel capital into projects and activities that advance the country’s transition to net zero.
“We are grateful to market participants for their feedback, which reflects the excellent relationship between ADGM and its stakeholders within our sustainable finance ecosystem.
“Their engagement will continue to be essential as ADGM actively supports the UAE’s progress towards its goal of net zero by 2050 and the continuing development of Abu Dhabi’s green falcon economy.”
The sustainable finance regulatory framework is also supported by the likes of the Abu Dhabi Sustainable Finance Declaration which has over 100 signatories, and the School of Sustainable Finance at the ADGM Academy.
