Emirates NBD Launches Ethical Carbon Trading

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by KnowESG
KnowESG_Emirates NBD carbon market trading
Image courtesy of https://www.bcg.com/

Emirates NBD, a prominent banking group in the MENAT region (Middle East, North Africa, and Türkiye), has taken the lead by offering carbon future contracts trading to meet the rising demand from corporations seeking to manage their carbon emissions and align with the UAE's Net Zero action plan.

The Group aims to maintain its position at the forefront of the rapidly evolving carbon trading landscape in the region, enabling clients to deal in carbon credits as they work towards their sustainability goals.

Ahead of the 28th United Nations Climate Change Conference (COP28) to be held in the UAE, the bank's carbon future contracts trading facility also grants access to a rapidly growing asset class estimated at USD 850 billion across six global emission trading schemes.

Emirates NBD's carbon contract trading adheres to the guidelines set by the European Union's Emission Trading System (ETS) and the United Kingdom's Emission Trading Scheme, ensuring full transparency, credibility, and accountability.

This "cap and trade" system incentivises companies to reduce emissions, fostering the adoption of cleaner technologies and practices to combat climate change. The UAE government supports the growth of carbon trading markets and plans to launch regulated carbon credit trading exchanges and clearing houses ahead of COP28, coinciding with the country's dedication to sustainability in 2023 under the theme 'Today for Tomorrow.'

The launch of trading capability in compliant carbon markets will also enhance corporate access to sustainability-linked finance, in line with the increasing demand for ESG-related financing. Green and sustainable financing in the UAE saw a remarkable 32% year-on-year increase in 2022, outpacing global growth in the sector.

The introduction of carbon trading by Emirates NBD contributes to the growth of the region's capital markets, making the UAE a hub for climate change financing and attracting global ESG investors.

Ahmed Al Qassim, Group Head of Wholesale Banking at Emirates NBD, expressed pride in facilitating client access to global compliance carbon markets ahead of COP28, enabling them to support their net zero ambitions and sustainability goals. The bank's commitment to providing innovative green financing solutions to regional and global clients aligns with the collective effort to make the global energy transition a reality.

Vijay Bains, Chief Sustainability Officer and Group Head of ESG at Emirates NBD highlighted the significance of the carbon trading facility in granting access to the world's most regulated carbon markets, in line with the 2023 Year of Sustainability and the UAE's revised Nationally Determined Goal of a 31% reduction in business-as-usual emissions by 2030.

The facility will become increasingly crucial for organisations to meet their net-zero ambitions and goals in a structured manner, aligning with COP28's climate change mitigation goal and the United Nations' Sustainable Development Goal 13.

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Source: Emirates NBD

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