Hello from Abu Dhabi, مرحبا من ابو ظبي,
This month, Abu Dhabi Sustainability Week (ADSW), successfully concluded its fifteenth edition, with a resounding show of commitment to climate action ahead of the United Nations Climate Change Conference (COP28), to be held in Expo City Dubai later this year. Under the theme of ‘United on Climate Action towards COP28,’ the six-day event was the first global sustainability gathering of the year. The next few years running up to 2030 will be crucial, with the COP28 in the UAE being a key milestone.
Dr Sultan Al Jaber, COP28 President-designate and the UAE’s special envoy on climate change, said on the first day of ADSW that countries must step up and work much faster on agreed goals. “Despite the progress that the world is making, we need to be honest with ourselves. We are way off track”…“we need to go much further and much faster. We’re playing catch-up in our efforts to keep 1.5°C alive” – which means cutting greenhouse gas emissions by half by 2030.
Rising temperatures are a threat to all countries. The goal is to transform systems and disrupt the current 2030 trajectories by ramping up climate progress across: Mitigation, Adaptation, Loss and Damage, Climate Finance and innovating the process through private sector engagement, inclusion, accountability & transparency.
Both from a climate and energy security perspective, it is more important and urgent than ever to accelerate the transition towards a highly efficient energy system with the ambition of reaching 100% energy supply through renewables.
The Abu Dhabi Sustainable Finance Forum hosted by Abu Dhabi Global Market on the 19th of January, showed that Sustainable Finance is coming to the fore on the agendas of financial institutions, governments, decision-making bodies and corporates, among others. The development of Sustainable Finance suggests that a paradigm shift is taking place within the financial industry, demonstrated by the changes in the priorities or guidelines that long governed financial systems and investment decisions.
The Paris Agreement of 2015 clearly states that the redirection of financial flows is an absolute requirement to achieve the current environmental objectives, as well as resolve the associated social challenges.
In 2020, Luxembourg launched the Luxembourg Sustainable Finance Initiative (LSFI) in order to have a coordinating entity in the field of Sustainable Finance, to find synergies among the different players, and raise awareness on this very relevant matter with the ultimate goal of advancing the sector’s transition.
Despite the economic uncertainty and market turmoil observed during the first half of 2022, Luxembourg-domiciled ESG (Environmental, Social, and Governance) funds registered EUR 2.2tn in total assets at the end of June 2022, representing approximately 54.6% of the country’s overall fund assets, which surpassed EUR 4.0tn by the same period.
During the Abu Dhabi Sustainable Finance Forum, the Luxembourg Stock Exchange (LuxSE) signed the Abu Dhabi Sustainable Finance Declaration. LuxSE is the first European exchange to officially join the mission of contributing to the growth of sustainable finance and sustainable development in the region. The total number of signatories from across the globe is 109 and includes leading banks, asset managers, financial services providers and other institutions active in the field of sustainability and sustainable finance.
The transition to a low-carbon economy needs to happen everywhere, and a sustainable finance market can help the UAE in its efforts to diversify its economy and achieve its ambitious goal of net zero by 2050.
In recent years, LuxSE and its platform exclusively dedicated to sustainable finance – the Luxembourg Green Exchange (LGX) – has placed a strong, strategic emphasis on its role in helping issuers in both developed and emerging economies. Currently displaying more than 1,500 sustainable bonds from 260 issuers in 50 countries raising a total of EUR 830 billion for sustainable development across the world, LGX helps new issuers in the process of issuing sustainable bonds through initiatives such as the LGX Academy and LGX Assistance Services.
All of these initiatives show that it is paramount that we work together for our economies to become more environmentally sustainable and to tackle climate change. If the EU is to achieve its climate goals, as set out in the European Green Deal, the engagement with GCC countries has to be substantially increased.
Jean-Marie Frentz
Executive Director, LTIO Abu Dhabi