ADIB is at the forefront of the UAE’s efforts in sustainable banking by becoming the first commercial Islamic bank in the region to publish an elaborate Net Zero report. The report explains ADIB’s commitment to achieving Net Zero emissions by 2030, aligning with the broader climate goals of the UAE. By setting clear targets in the sectors it finances, ADIB aims to reduce both its own direct emissions and those linked to its financing activities.
Targeting Operational Emissions
In its latest Net Zero report, ADIB has pledged to cut its operation emissions by 49 percent by 2030, compared with 2022 levels. This is a step in the bank’s wider strategy to contribute to the UAE’s national climate goals. The report identifies six major sources of emissions in its financing portfolio: home finance, auto finance, real estate, air transport, utilities, and petroleum manufacturing. These sectors represent about 40% of the emissions associated with the bank’s financing activities.
Commitment to Sustainable Banking
In pursuit of its commitment, ADIB focuses on both direct emissions emanating from operations as well as supporting the decarbonisation of sectors it finances. Efforts by the bank aim toward environmental sustainability as well as aligning support for the wider financial sector’s role in combating climate change. ADIB’s approach is a pioneering example of how Islamic banks can lead in sustainable finance and integrate environmental goals into their core business strategies.
To track its progress, ADIB uses globally recognized standards such as the Partnership for Carbon Accounting Financials (PCAF) and the Greenhouse Gas (GHG) Protocol. Through these frameworks, the bank will calculate and report emissions across both its operations and financing activities; therefore, its journey to Net Zero is measurable and transparent.
Financing the Transition
The bank also mentions its commitment to collaboration with its customers and partners in their efforts to decarbonise. ADIB is committed to mobilizing more green and transition finance to overcome any financial barriers to sustainability. Providing access to much-needed capital to encourage businesses and industries to switch to low-carbon alternatives while helping solve some of the high emission-related challenges is the objective.
This proactive approach positions ADIB in line with the UAE’s strategy to migrate towards an economy with lower carbon footprints. As the country continues moving to meet its climate targets, ADIB is positioning itself as a sustainable banking leader, having a defined strategy for reducing its own footprint while supporting the larger transition to a greener future.
Measuring Emissions and Tracking Progress
The ADIB Net Zero report also mentions how the bank will measure its progress toward its targets on emissions reduction. The use of standards such as PCAF and GHG Protocol ensures that carbon footprint for this bank is calculated consistently and transparently. Through the employment of internationally recognized frameworks, ADIB ensures that the journey to Net Zero is in truth credible and verifiable data.
Importantly, the report also mentions the bank’s preparedness to face future environmental challenges. It will continue to assess and reduce its emissions, with transparency in every step it takes and accountability regarding the progress it makes. This helps instill trust among customers, investors, and other stakeholders as it embarks on its sustainability journey.
Going Forward
While the road to Net Zero may be challenging, ADIB has proved it does mean business on this sustainability front. In itself, the bank is engaging as much as possible with its customers and partners to be able to assist them in transitioning to a low-carbon economy. By working together and innovating, ADIB seeks to advance positive environmental change, supporting the UAE’s ambitious climate agenda as well.
With this report, ADIB not only guided its own sustainability work but also set an example for other banks operating in the region. Given that ADIB is the first Islamic bank in the UAE to develop a detailed Net Zero report, leadership by ADIB in sustainable finance is likely to ripple beyond the financial sector and challenge other institutions to similarly reduce their impact on the environment.
Conclusion
This means ADIB is leading the way in sustainable banking in the UAE, bringing it closer to achieving Net Zero by 2030. It has outlined clear targets, transparent reporting, and sectors to cut emissions. The proactive approach of ADIB while being part of a country keen on pursuing a low-carbon economy underlines what an integral role a financial institution can take in the pursuit of climate goals and driving towards a greener economy.
Source: Abu Dhabi Islamic Bank (ADIB)