Abu Dhabi Commercial Bank (ADCB) has joined the Net Zero Banking Alliance (NZBA). The organisation comprises a group of over 130 leading global banks with $74trn in total assets. The NZBA is convened by the UN Environment Programme Finance Initiative (UNEP FI). The industry-led initiative aligns the lending and investment portfolios of financial institutions. The aim is to contribute towards the imperative of limiting global warming to 1.5°C, in line with the Paris Agreement.
Net Zero Banking Alliance aims
As a member of NZBA, ADCB is committed to transition the operational and attributable greenhouse gas emissions from lending and investment portfolios to align with pathways that are consistent with achieving net zero by 2050 or sooner. Within 18 months of joining, ADCB set targets for 2030 or sooner and a 2050 target. In addition, intermediary targets will be set every five years from 2030 onwards. The Bank’s first 2030 targets will focus on priority sectors where it can have the most significant impact. Examples include the most greenhouse gas-intensive sectors, with further sector targets to be set within 36 months.
In addition, ADCB will publish annually absolute emissions and emissions intensity in line with best practice. Within a year of setting targets, it will disclose progress against a board-level reviewed transition strategy setting out proposed actions and climate-related sectoral policies. Finally, ADCB will take a robust approach to the role of offsets in transition plans.
ADCB commits to AED125bn in sustainable financing by 2030
Alaa’a Eraiqat, Group CEO, said: The UAE has set a clear ambition to transition to a net zero economy supported by new regulations. We recognise the vital role that banks have to play in driving this transformation. We are proud to announce that ADCB has joined the Net Zero Banking Alliance. This represents over 40% of global banking assets. We will work alongside national and global partners to develop sector pathways for the region.
“The bank will also deepen collaboration with customers to ensure they succeed on their path to net zero. Investment in decarbonisation represents a significant economic opportunity. By committing AED125bn ($34.1bn) in sustainable finance by 2030, ADCB will make a substantial contribution to realising the UAE’s climate agenda.”
ADCB’s approach to climate – partners in the transition to net zero
In line with the UAE’s net zero by 2050 ambition, ADCB has enhanced its climate strategy. Specifically, it will drive emission reductions across its financing, operations and supply chain. As well as tripling its sustainable finance commitment to AED 125bn by 2030, it has set a shorter-term target of AED50bn by 2025.
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Since 2021, the bank has raised and facilitated over AED23bn in sustainable finance. This incorporates green bonds, sustainability-linked loans, renewable energy project financing and green loans.
Finally, the bank says it is determined to make low-carbon lifestyles financially accessible to more people in the UAE. It is expanding its range of products to help individuals and families make more environmentally conscious decisions. It already offers preferential loans for electric and hybrid cars and green mortgages to incentivise energy efficient homes.