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ADCB named ESG Leader with MSCI ‘AA’ Rating Upgrade

by Rachel
written by Rachel

The Abu Dhabi Commercial Bank P.J.S.C (ADCB) has achieved an upgrade in its MSCI ESG rating to ‘AA’ from ‘A’, reflecting the Bank’s progress in sustainable finance initiatives, ESG due diligence, industry-leading data privacy management and security and ethical business practices. The upgrade places ADCB in the MSCI ‘industry leader’ category for managing ESG risks and opportunities.

ADCB’s strongest result came from the impact of its environmental financing, achieving a score of 9.1 out of 10. This emphasises the Bank’s commitment to sustainable finance, having financed AED 47.5 billion in sustainable activities since 2021, and successfully issuing AED 4.2 billion in green bonds.

ADCB has also launched its second Green Bond Report, which details the impact of the Bank’s Eligible Green Loan Portfolio, which has grown by 84 per cent year-on-year with an estimated 1.8 million tonnes of CO2 emissions avoided annually.

The report is independently assured in accordance with its Green Bond Framework, based on the International Capital Markets Association (ICMA) Green Bonds Principles.

“The notable ESG rating upgrade reflects ADCB’s commitment to industry leading practices in sustainability”, said Ala’a Eraiqat, Group CEO of ADCB. “As a major UAE financial institution, we recognise the importance of managing our impacts for the benefit of our stakeholders.”

“Sustainability is a cornerstone of our corporate strategy, and we continue to integrate environment and social considerations into our lending decisions, and to increase sustainable financing. Our 2024 Green Bond Report showcases how the Bank’s financing of environmental projects delivers a positive impact for society and supports the UAE Net Zero by 2050 strategic initiative.”

The Bank is a member of the UN-convened Net Zero Banking Alliance (NZBA), a group of over 140 leading global banks with more than USD 74 trillion in total assets committed to financing climate action and reducing their emissions in line with the goals of the Paris Agreement.

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FinanceSpecial Reports

Emerging Market Green Bonds Report 2023

by Madaline Dunn
written by Madaline Dunn

European asset manager Amundi and the IFC, a member of the World Bank Group, have published the sixth edition of the Emerging Market Green Bonds Report.

The report provides insight into the developments in the green bonds market for emerging markets and developing economies (EMDEs). 

The report found that the overall market for sustainable finance in EMDEs staged a rebound in new debt issuance during 2023 on the back of lower inflation expectations.

Specifically, it highlights a strong rebound in GSSS bonds issuance globally (up by 11 per cent, after a 10 per cent retreat in 2022), driven by green bonds (up 15 per cent) as well as by emerging markets (up 45 per cent), reaching $1 trillion to match the all-time high seen in 2021.

Meanwhile, in emerging markets, strong GSSS bonds issuance was seen across all sub-segments (up by 45 per cent overall in emerging markets and 65 per cent in EMDEs outside China). 

Further, it shared that China’s strong but relatively slower GSSS bonds issuance (up by 28 per cent) was driven by a combination of two factors:

  • Some reversion from a “remarkably” strong 2022, and 
  • Weaker domestic economic dynamics, particularly in the construction and real estate sectors.

In EMDEs outside China, GSSS bonds issuance was mainly driven by green bonds, which increased by 81 per cent. 

In the Middle East and North Africa, most notably UAE and Saudi Arabia, green bonds issuances more than doubled.

Non-financial corporates remained the largest green bonds issuers in developed markets (36 per cent of the total), while financial institutions dominated in emerging markets (58 per cent of the total). 

Meanwhile, green bonds issuance by sovereigns grew strongly: 33 per cent globally and 226 per cent in emerging markets.

The largest share of funds raised from the green instruments in EMDEs during 2023 was allocated for renewables, at 37 per cent. 

The next biggest allocation was for green buildings claiming 29 per cent of the total from 9 per cent a year earlier.

Read the full report here.

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FinanceLatest News

Saudi Arabia MoF launches Green Financing Framework

by Madaline Dunn
written by Madaline Dunn

Last week, Saudi Arabia’s Ministry of Finance (MoF) launched its Green Financing Framework under the Financial Sector Development Program, aimed at driving forward sustainable funding efforts and achieving Vision 2030 goals.

The framework outlines eight types of projects eligible for funding through green bonds, including renewable energy, energy efficiency, sustainable transport, climate adaptation and more.

A timeline for the issuance wasn’t shared; however, issuances will be done through the MoF, with two committees responsible for oversight and funding allocation: the Sustainable Financing Committee and the Projects and Monitoring Committee.

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FinanceSpecial Reports

S&P: Sustainable Bond Issuance To Approach $1 Trillion In 2024

by Madaline Dunn
written by Madaline Dunn

S&P Global Ratings has provided its outlook for the green, social, sustainability, and sustainability-linked bond (GSSSB) market for 2024.

Its report forecasts that sustainable bond issuance will likely reach US$1 trillion this year. 

Further, it notes that green bonds will continue their dominance in GSSSB markets, buoyed by increased demand for environmental projects across all geographies. 

Transition and blue bonds may also gain traction in the GSSSB market in 2024, it shared. 

The report anticipates that GSSSB issuance will increase modestly to $0.95 trillion-$1.05 trillion in 2024, from $0.98 trillion in 2023.

“GSSSB issuance could represent 14% of total bond issuance in 2024. In our opinion, GSSSB issuance will rise at nearly the same pace as conventional bond issuance for the second consecutive year,” the report said. 

The factors underpinning growth here include:

  • Increased adoption of sustainable taxonomies and transparency initiatives, 
  • Growth in issuance from emerging markets, and 
  • Efforts to accelerate the energy transition.

However, the report notes that certain macroeconomic factors could restrict issuance, including uncertainty associated with high interest rates and the possibility of wider economic slowdown in key regions such as Europe and Asia-Pacific.

Read the full report here. 

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