Mashreq bolsters sustainability goals by joining World GBC

UAE’s Mashreq Bank has joined the World Green Building Council’s (WorldGBC) advancing net zero readiness framework as a collaborator in the MENA region to advance sustainable investing.

The collaboration with WorldGBC offers Mashreq a platform to showcase industry best practices while furthering its own commitment to net zero. It also accelerates the WorldGBC’s net zero programmes in the MENA region through engagements with key stakeholders and contributing to various net zero initiatives across the region ahead of COP28 in the UAE later this year.

The MENA region’s population growth has been strongly characterised by rapid urbanisation and is projected to double its urban population between 2010 and 2050. With the resulting increased demand for housing, the region is set to be critical for the growth of green buildings globally over the next few years.

With the goal to contribute to the advancement of #NetZero efforts in MENA ahead of #COP28, #Mashreq has joined the @WorldGBC Net Zero Readiness Framework for MENA as a Net Zero collaborator. https://t.co/VQxAYLdwG1#RiseEveryDay #Rise_Every_Day #SustainableFinance pic.twitter.com/Ybkoq5pJiA

— Mashreq (@MashreqTweets) April 13, 2023

The collaboration between public and private sector entities is paramount for countries in the Middle East to remain on track to achieve the net zero global and regional goals.

“As the UAE gets ready to host COP28 later this year, this program puts Mashreq at the forefront of shaping, contributing and supporting the MENA region’s strategic direction towards net zero at a crucial time for the nation’s climate efforts,” said Ahmed Abdelaal, Group CEO at Mashreq.

Read: UAE’s Mashreq finances sustainable investments worth $15.5bn

The partnership with WorldGBC is part of Mashreq’s wider commitment to tackling climate change and supporting sustainable finance as a fundamental enabler of the transition to a more sustainable world. Last year, the bank joined the United Nations Global Compact initiative to further push its efforts to embed strong ESG practices across the organisation.

Mashreq’s net zero commitment

Meanwhile, Mashreq has financed sustainable and adaptation-linked investments worth $15.5bn since January 2021 as businesses and governments globally are increasingly recognising that environmental, social and governance (ESG) risks and opportunities are fundamental to guarantee long-term success.

The said ESG is related to cash flow in five important ways. It minimises regulatory and legal intervention, increases employee productivity, optimises investment and capital expenditures, facilitates top-line growth and reduces costs by lowering energy consumption.

The financial sector has an important commitment to make in supporting ESG adoption across the supply chain by developing financial solutions that help businesses achieve their objectives.

Green bonds are an excellent example of this, but they can also be extended to ESG-linked supply chain finance programmes that reward suppliers who meet specified targets with a lower cost of working capital.

S&P Global projected in February that total global bond issuance will grow only moderately in 2023. However, the rating agency said faster growth for green, social, sustainable and sustainability-linked bond issuance will lead to a larger market share for this asset class across all regions and sectors.

Mashreq reported a full-year net profit of $1bn (Dhs3.7bn) in 2022. The bank’s operating profit surged nearly 40 per cent to Dhs4.4bn in 2022 driven by the lender’s healthy operating income growth while customer deposits rose by 12 per cent year to date to Dhs113.8bn.

The Dubai-based lender’s digital solutions including Neo and personal banking net profit grew by 43 per cent while NeoBiz and NEOPAY have grown in net profit by 289 per cent and 37 per cent, respectively.

Read: Here’s why ESG adoption is a must for businesses