UAE Sustainable Finance Framework 2021 - 2031.

This UAE Sustainable Finance Framework is a 10-year nationwide multisectoral document serving as a milestone, aiming to bolster financial sustainability by integrating environmental and climate change considerations into mainstream finance. This initiative, the first of its kind in the country, envisions enhancing both the supply and management of finance through robust risk management and strategic investments in green and climate-resilient projects. It aims to strengthen the enabling environment for sustainable finance, thereby fostering sustainable development. The scale of investment needed to implement various green initiatives surpasses what public resources alone can provide. Hence, the document advocates strongly for private sector engagement to supplement public endeavors in reaching climate objectives. Concurrently, the government pledges to support these private sector efforts and tackle current challenges and gaps in sustainable finance, thereby enhancing the conditions for green investments. The UAE recognizes the need to address various societal aspects beyond its economy, including immediate health issues and growing demands for recovery plans. Attention is directed towards understanding and managing Environmental, Social, and Governance (ESG) risks, alongside climate-related risks, in order to mitigate disruptions and foster sustainable development. The Sustainable Finance Framework aims to (i) support diverse and innovative sustainable finance products; (ii) mobilize private capital towards environmentally resilient investments; (iii) address existing challenges and gaps. It seeks to mainstream sustainable finance practices, incentivize participation, and enhance the supply and demand for green and climate-resilient financial products.
The stakeholder sentiments collected from a market survey helped shed light on the practices in sustainable finance that need the most attention, guiding the further development of the Framework. Accordingly, the main pillars of the Framework were designed to address these areas: (1) Mainstreaming sustainability in risk management and financial decision-making; (2) Enhancing demand and supply for sustainable finance; (3) Strengthening the enabling environment for green investments and products. These pillars promote collaboration between stakeholders in the real estate and financial sectors to advance sustainable finance practices.