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How the UAE’s biggest bank is approaching sustainability at COP28

Listen: How the UAE’s biggest bank is approaching sustainability at COP28

In this episode of the ESG Insider podcast, we sit down on the sidelines of COP28 in Dubai with the Chief Sustainability Officer of the largest bank in the United Arab Emirates — First Abu Dhabi Bank (FAB).  

The UAE holds the COP28 presidency, and Shargiil Bashir talks to us about his hopes for the UN’s climate change conference, FAB’s sustainability strategy, and the evolving approach to climate change in the Middle East.   

"Nobody will get hurt more than the Middle East if we don't address those challenges because this country is going to get most impacted by climate change," Shargiil says. "There's so much more to do, so many more actions to take — but I definitely recognize the big steps that have been taken already."    

Listen to more episodes covering COP28:

For more information on COP28 developments, see news from S&P Global Commodity Insights here.

Read the COP28 Special Edition of the S&P Global Sustainability Quarterly for research and insights on key themes that in focus in Dubai here.

This piece was published by S&P Global Sustainable1, a part of S&P Global.

Copyright ©2023 by S&P Global


By accessing this Podcast, I acknowledge that S&P GLOBAL makes no warranty, guarantee, or representation as to the accuracy or sufficiency of the information featured in this Podcast. The information, opinions, and recommendations presented in this Podcast are for general information only and any reliance on the information provided in this Podcast is done at your own risk. This Podcast should not be considered professional advice. Unless specifically stated otherwise, S&P GLOBAL does not endorse, approve, recommend, or certify any information, product, process, service, or organization presented or mentioned in this Podcast, and information from this Podcast should not be referenced in any way to imply such approval or endorsement. The third party materials or content of any third party site referenced in this Podcast do not necessarily reflect the opinions, standards or policies of S&P GLOBAL. S&P GLOBAL assumes no responsibility or liability for the accuracy or completeness of the content contained in third party materials or on third party sites referenced in this Podcast or the compliance with applicable laws of such materials and/or links referenced herein. Moreover, S&P GLOBAL makes no warranty that this Podcast, or the server that makes it available, is free of viruses, worms, or other elements or codes that manifest contaminating or destructive properties. 

Transcript provided by Kensho.

Lindsey Hall: I'm Lindsey Hall, Head of thought leadership at S&P Global Sustainable1.   

Esther Whieldon: And I'm Esther Whieldon, a senior writer on the Sustainable1 Thought Leadership Team   

Lindsey Hall: Welcome to ESG Insider, a podcast hosted by S&P Global, where we explore environmental, social and governance issues that are shaping investor activity and company strategy. 

Esther Whieldon: Welcome to our special series of on-the-ground coverage from COP28. 

Lindsey Hall: That’s right, I’ve been conducting interviews on the sidelines of the UN climate change conference known as COP. I’ve been talking to attendees about some of the big themes emerging from this global gathering—including the role that finance plays in finding solutions to the climate crisis.  

The United Arab Emirates holds the COP28 presidency and the event is taking place in Dubai. And I wanted to hear the perspective of a local financial institution. So in today’s episode I’m sitting down with Shargiil Bashir, the chief sustainability officer at First Abu Dhabi Bank. FAB is the largest bank in the UAE and one of the largest in the Middle East. 

I sat down with Sharjiil in the Green Zone at COP. The main COP venue includes two zones: the Blue Zone is open to accredited party and observer delegates, and this is where formal negotiations and discussions take place. And the Green Zone is open to all and that’s where my interview takes place, in the Finance Hub. This is essentially a giant hall where many different companies and organizations host booths, interactive exhibits and panels.   

And as you’ll hear me mention in the interview, First Abu Dhabi Bank grabbed my attention right away. Because as soon as I walked into this giant exhibition hall, I heard shouting. And when I went to investigate, I found a crowd of people jostling one another in a mock-trading floor for carbon credits that the bank had set up. Another part of the bank’s exhibit focused on the role of nature by highlighting the ghaf tree — which, as you’ll hear in the interview, is the national tree of the UAE.  

You’ll hear Shargiil mention some early developments from COP28, like the loss and damage fund. On Day 1 of COP, several countries and the EU pledged more than $420 million to a new “loss and damage” fund to assist countries especially vulnerable to the effects of climate change. 

He also talks about the Alterra Fund: On Dec. 1, the UAE committed $30 billion US dollars in catalytic capital to launch a climate-focused investment vehicle called ALTÉRRA. This aims to advance international efforts to create a fairer climate finance system, with an emphasis on improving access to funding for the Global South. 

And he mentions the first-ever dedicated ‘Health Day’ at a COP, which took place Dec. 3; ahead of that day, global leaders endorsed a “Health and Climate Change Declaration” that emphasizes the severe health implications of climate change and the urgent need to confront the connections between climate change and health.  

At COP28, the World Health Organization’s Director General told delegates that ““The climate crisis is a health crisis.” 

Lastly, he mentions a couple sustainability efforts that FAB is involved in, like the Equator Principles. This is a risk management framework for financial institutions to determine, assess and manage environmental and social risk across financed projects. And then there’s the Abu Dhabi Sustainable Finance Declaration; which is a voluntary membership-based initiative that aims to increase the quality and depth of green financial products in Abu Dhabi and create a thriving sustainable finance industry in the region. 

Ok, let’s turn to my now to my interview to learn more about the bank’s approach to sustainability, its presence at COP28 and how the Middle East is approaching climate change.  

Shargiil Bashir: My name is Shargiil Bashir. I'm the Chief Sustainability Officer at First Abu Dhabi Bank.And I have been with the First Abu Dhabi Bank for 3 years, where I've been heading our sustainability efforts across the group. And I've been in the banking sector for over 20 years and there are multiple different roles across banking, mostly my career, I've been in the Northern Europe, mostly in Denmark and in the U.K. I'm originally from Denmark. And I've been working for the past 3 years in the UAE and working in the biggest bank in the region, First Abu Dhabi Bank.

Lindsey Hall: So what can you tell me about sustainability and how first First Abu Dhabi Bank shows up in the sustainability space.

Shargiil Bashir: So First Abu Dhabi Bank started his journey on sustainability actually over a decade ago, back in 2010, when we issued our first sustainability report as the first bank in the MENA region. And since then, we have taken small steps at a time and matured ourselves from that perspective. Sustainability is a topic that is still maturing in the region overall. But First Abu Dhabi Bank continue taking these steps by step. 

We issued our first green bond back in 2017 as the first bank in the region. We also was a signatory to the Equator Principles -- after that, we were the founding signatories of Abu Dhabi sustainability finance declaration. In 2021, where the biggest steps came from an FAB perspective related to sustainability was when we made a commitment to become net zero by 2050 in October 2021. This was on the back of UAE committing to net zero by 2050 as the first country in the region. As the biggest bank in the country, we wanted to support that ambition and made the similar commitment as well. And we joined the Net Zero Banking Alliance convened under the UN, which was a very important step for us. And one of the reasons we did that was that we wanted to work in an industry-based framework. 

For us, being in a market that is still evolving from a sustainability perspective, we both wanted to share our experiences, but also wanted to learn from the other experiences that how is it that we can progress on our sustainability journey. 

And for us, it has been extremely important to do this because we want to support our clients which are transitioning to net zero. So for us to support them on this, it's important that we understand that what is it that we want to do as an organization as a bank, but also what are the steps that we can take to support our clients as well. So as part of that commitment, we have committed that we will be net zero from our own operations by 2030. And we, of course, want to be net zero from our finance emissions perspective, which is the biggest part of our emissions by 2050. Earlier this year, in 2023, we set our first interim target for 3 sectors: oil and gas, aviation and power generation. And just recently, in November, we have added additional 5 sectors. So we have now set the finance emission interim targets for 2030, which covers more than 90% of our finance emissions. 

And also, in order to support our clients, we made a commitment that we will facilitate more than US$75 billion of sustainable financing by 2030. We did make this commitment in 2021. In the first 2 years of this commitment, we have already facilitated more than 35% in this commitment. So we are also starting to see a big growth and a big transition that is starting to take place in the region as well. And we, of course, want to be there to support our clients in this transition.

Lindsey Hall: You mentioned that the region is evolving in its sustainability journey. Can you say a little bit more about that, help our listeners understand where things stand in the Middle East?

Shargiil Bashir: So the more and more countries since UAE committed to net zero has made a similar commitment to becoming net zero by 2050. Policy and regulation are still being defined. The Europe and part of the U.S. are much more advanced, these directions are still being established. Much more has happened on a voluntary basis. We have now started to see disclosure requirements coming through. Only recently, we have seen the Central Bank of the UAE putting standards and directions for climate stress testing as well as coming through. 

So we are now moving very fast towards where Europe is right now. We are progressing on that journey, but we are slowly wanted to make sure that the awareness part is following through as well. The banking sector needs to raise awareness, both from an industry perspective, but also from the capability perspective as well. So that's where a lot of the focus has been so far that how can we ensure that we raise capability of the employees to understand the topic of sustainability. And this links very well to that UAE earlier this year declared 2023 as a year of sustainability, UAE is hosting the COP, which is also further accelerating the focus on sustainability last year the MENA Climate Week was introduced, which was held in Dubai.

This year, it was held in Riyadh. So we are also starting to see these initiatives and gatherings coming through that are supporting with raising the awareness in the region on the topic of sustainability.

Lindsey Hall: Okay. Great. And just for our listeners, MENA is the Middle East and North Africa region.

Shargiil Bashir: Correct.

Lindsey Hall: So as you mentioned, COP28 is happening right now, and you can hear all around us, the buzz of this very busy Climate Finance Pavilion where we're having this conversation. Can you set the scene for our listeners? What's the setup here?

Shargiil Bashir: Yes. So we are right now in the Climate Finance hub. We are here with a dozen of other banks that are also focusing on the topic of sustainability. Our pavilion is a large pavilion, which has focusing on, we'rel trying to use COP28 and this per billion as our platform. So the topics we are highlighting during COP are a 6-point agenda that we have coming to. It was the same 6-point agenda we had at COP26, COP27 and will continue to have because we believe that is the consistency we need, but we use COP as a platform to highlight that what have we done and what is it that we continue to do more of. 

Our focus has been very much about engagement. So in the center of our pavilion is a theater that can host around 70 people. We are having over 70 panel discussions, roundtables taking place, where we are bringing subject matter experts. We are bringing clients, we are bringing policymakers, other stakeholders to come and discuss some of these topics. And the topic we are discussing our 6-point agenda is scaling sustainable finance, which is also a very important topic from a COP28 perspective, but also where we believe as the financial sector can really make a difference and make a contribution. 

The second topic is about transition to net-zero. And here, we are focusing across different industries that how does the transition to net zero look like, as an example, for the real estate sector versus the heavy industries versus, let's say, the aviation sector. So we are bringing the different sectors together to say, how does that transition look like, what are the best practices, what are the challenges that we can address. 

The third topic that is very much in focus and a very important topic for us is raising awareness among SMEs. So SMEs play such an important role in the transition to net-zero because they're basically Scope 3 for a lot of the large corporates, which are so critical in order for this transition, but they don't have the luxury of having sustainability teams and so on. So we want to make sure that this awareness is raised for them. 

And that's why we are supporting the COP28 presidency with the SME Climate Hub that was launched, which is basically a platform that raises your awareness where there's a lot of training that is available that can raise your understanding on the topic of sustainability. There are specific tools that can help you calculate your emissions, the different guidance that how can you start reporting on it, which is all available free for the SMEs that has been introduced in the UAE. And we are very proud to be able to support that initiative because we believe that there's something as concrete as that is required to raise the awareness for the SMEs so they can start their sustainability journey.

Lindsey Hall: When you're talking about the SMEs and the small to medium-sized enterprises, can you really connect the dots for listeners about what you mean when you're talking about Scope 3 emissions for you as a bank?

Shargiil Bashir: So for us, our Scope 3 is basically our clients'  Scope 1 and 2. And when we start by understanding our clients' Scope 1 and 2, they also want to understand their Scope 3. So when we are speaking about the large corporates specifically, their Scope 3 are typically their supply chain, which are the SMEs. So for those SMEs have such an important influence on our large corporates who needs to do the transition. 

So for us to be able to support our full ecosystem it's important that we can support the large corporates, which can be through financing, advisory product services, it's also important that we raise the awareness for the SMEs who might not always need as complicated products and services but need to have more understanding, tailor-made information that they can easily work with and understand to get them started on their sustainability journey.

Lindsey Hall: Great. That's very helpful. Thank you please, proceed, because you were giving me the list of the topics.

Shargiil Bashir: Yes. And the fourth topic we are coming to is carbon markets. We believe that carbon markets net zero is going to be very, very difficult to achieve without the carbon markets and carbon credits. So it's extremely important for that. And you might have heard earlier today that there was a lot of noise in our pavilion. And this is because that we every day have ensured that we simulate a trading carbon trading gain. Which is basically that you imagine that you're sitting on a dealer floor and a carbon trading is going to happen and the trading is being done between different partners. And there are small gifts that if you win that competition, that how that can be done. And it has been hugely visited a big success because people want to understand how those carbon credits actually work. 

But again, for us using a platform that a complicated topic like carbon credits, we can try to show people and explain what it actually means when you start trading carbon credits. So that has been a very important part of it. 

The other topic we are having very much focused is on the social part. And from a social perspective, we are focusing a lot on the youth. So what we've actually done is that every day in our pavilion from 5 to 6 p.m., we are hosting a session where we are asking the youth to come and participate in these panel discussions. To come with their viewpoint. As an example, recently, we had a discussion with the youth where we invited students from the universities to discuss their view on global stocktake. We're inviting them to come with their perspective that since they are living in the time where we are discussing net zero, what does that mean for them and how can they influence this. So we are very engaged in bringing the youth to the table, and we have dedicated this hour every day that this conversation is going to take place. 

Similarly, by the way, on SMEs, every morning from 10 to 11, we're having a session with the SMEs where we are bringing the SMEs to come and share their best practices, but also their challenges on this topic specifically. 

And the last topic we are focusing on is nature. Nature is extremely important. So we want to focus on that specifically. So that's very, very important for us to address as well.

Lindsey Hall: That's really interesting what you're saying about hearing the voices of the youth and also hearing the voices of the SMEs. Anything you could generalize about what you've been hearing from either of those groups so far?

Shargiil Bashir: I think Youth has been, I have been so positively surprised by the focus that the youth has and the energy they have and the commitment they have that they want to make this change. We have been able to -- we have also brought in a lot of youth to be volunteering in our pavilion as well, and we were literally overflown by the interest from youth who wanted to participate in this discussion as well. We have done multiple activities and engagement here. One is, of course, coming and being a volunteer in our pavilion. It's about coming and participating in this discussion. 

We've also been running collaboration with the universities in the UAE, where we launched initiative called Future Business Leaders program, which we did actually during COP27, where we ask the students to answer 3 questions on the topic of sustainability and do an assay where they come and bring their perspective to some of these difficult challenges, and we had so big interest from that perspective. 

So I think that the biggest thing that have given me surprised me so much and really is comforting me is the level of engagement that we are seeing from the youth on the topic of climate change and how they want to participate and they want to make a difference. It's so important and it is so good to see that we have such an engaged youth that wants to focus on this. So that has been great. 

From an SME perspective, I think that the SMEs are really starting to understand their role in this ecosystem of net zero and what this means. And I think even more importantly, which I think that we have seen over the past couple of days in our session is the business opportunity it's creating for them because they are -- the SMEs that have started to focus on the transition and on net zero and sustainability are differentiating themselves. And they are starting to see that from a top-down perspective, more and more companies want to work with, they want to procure from sustainable suppliers. And now suddenly, they have a better opportunity than their competitor had who might do things slightly cheaper than them, but might not have the sustainable products and the sustainable credentials, which is giving them a unique position. So those 2 things I would like to highlight has been really good to see in the first couple of days of COP

Lindsey Hall: Okay. Thank you. And then on the topic of nature, this is something that's coming up a lot at COP so far, the intersection of climate and nature. How are you as a bank approaching this topic?

Shargiil Bashir: I think the nature topic from a banking sector is extremely interesting. And it's still -- I would still say that it's still in a very nascent place from where I see it right now because climate change is something we have been focusing a lot on from a banking industry, I would say, since the Paris agreement and especially since COP26. And we're also starting slowly to see similar directions coming on nature. 

As an example, we have been co-leading a work with Principal for Responsible Banking, specifically on how banks can start setting targets on nature specifically. So we're still very early stages because we need to understand our clients' impacts on nature before we can start understanding or impact on nature as well. And all these things are so interconnected and it comes back to the data part, getting the information and disclosure from your clients, getting your own data and disclosures in place as well. 

So I would say it's very, very early stages to start really understanding the topic of nature and how -- what kind of impact you make as a bank. So we have started this journey this year, and this is something we would like to accelerate in coming months as well.

Lindsey Hall: And this is another exhibit that you have here in your pavilion related to nature, which, again, it's a very striking way to make this somewhat abstract idea very concrete. Can you say a little bit about what it is?

Shargiil Bashir: Yes. So we have in our pavilion we have set up. So the topic is that have you ever heard a ghaf tree sing and a ghaf tree is the national tree of the UAE because it does not need a lot of water, and it can basically grow everywhere which is quite important in this climate we have in the UAE. 

And what we have found is that through some technology where you can use ultrasound and so on, each tree have it sound, something that be as normal humans do not hear, but each tree has a sound that it makes. And through this technology, we have connected to the ghaf tree, so you can actually hear the sound of the tree itself. And for us, it's a very important sign to say that nature has a voice and we need to take care of nature. We cannot keep ignoring the nature around us. 

And nature has been such an important part of the UAE for decades. The leadership of the UAE has done tremendous work on focusing on nature, saving the nature. Mangroves is a key thing in the UAE. And for us, this is a very important sign to show that actually now we can hear the sound of nature, and we can relate to it, and we need to keep saving this nature for the future generation and for the benefit of the planet.

Lindsey Hall: So we've touched on a lot of topics that are coming up here at COP, and we're having this conversation on finance today, the finance focused thematic day. Would love to just get your perspective on what key takeaways you have from up overall so far.

Shargiil Bashir: I think -- listen, this is my fourth COP I'm participating in. And for me, the first couple of days that this COP has been very overwhelming because there have been so many announcements. Because typically, during the other crops, we have waited for the last week and so to see some negotiations coming through some agreements being made. But already on day 1, we had the loss and damage fund that was agreed. We saw on day 2, the Alterra Fund being announced where there was a commitment coming of US$30 billion towards climate action specifically. Yesterday, we saw an announcement coming specifically on Climate and health for the first time ever we had a health day at COP. And basically, the climate crisis is equal to health crisis. So we are starting to acknowledging that and putting focus on that topic. 

So I think there have been so many announcements that it's so difficult to keep track of all of them, but so much has taken place. And I think it is so good to see that this COP was supposed to be COP of actions. And we have already, in the first 3 days seen so many key actionable announcement being made where money has been actually put on the table and says these are the investments we're going to do. This is where we're going to support with these things. So it's not only about commitments or directions. It's actually concrete actions. That has been very important for me because we need to keep 1.5 degree alive. We need to continue to have the commitment towards the climate change, becoming more concrete, more actionable. We need to show progress. And that's why it's so important that we are seeing the leadership of the world coming together and showing those concrete actions.

Lindsey Hall: Okay. Is there anything that I haven't asked about that you think is important for our listeners who are all over the world to understand about your perspective and what's happening here in the Middle East at COP?

Shargiil Bashir: I think...Being a Dane myself, I think sometime that you underestimate how much work is being done in the Middle East on the topic of climate change coming from a country which is known for clean energy in Denmark and windmills and so on. And coming to this region and seeing that how much focus there is on the transition on climate change, how much focus is on embedding renewable energy part of the future energy mix. I think that sometimes gets lost in translation. I think that the Middleast is is doing so much on this topic so much on this transition because nobody will get hurt more than the Middle East, if we don't address those challenges because this country is going to get most impacted by the climate change. We are seeing the temperatures rising and will continue rising if we don't address this. So there is a burning platform literally here and Middle East is doing so much. And I really hope that the people that are attending COP and the region overall are able to see the focus on the climate change that is being taken. There's much more work to do. I'm not saying that we are -- we have done a home run. There's so much more to do, so many more actions to take. But I think that I definitely recognize the big steps that have been taken already.

Lindsey Hall: So we heard Shargiil say that the Middle East approach to sustainability continues to evolve; and he sees room for further progress in the banking sector, in particular as it relates to understanding the role of nature.

He also highlighted steps the region has already taken — including the UAE’s net zero goal and the fact that the emirates declared 2023 “the year of sustainability.” He talked about the role of youth voices at COP28 and the enthusiasm and energy this group is bringing to the table—this is a topic we heard about from Henk Rogers in a recent episode, we’ll hear more about in an upcoming episode. And lastly, he talked about something I’ve heard a lot this COP28: the importance of moving from ambitions to concrete actions and solutions.   

Esther Whieldon: Thanks for listening to our special series about COP28. We'll be back with more interviews from Dubai and upcoming episodes, so please stay tuned.

Lindsey Hall: Thanks so much for listening to this episode of ESG Insider and a special thanks to our producer, Kyle Cangialosi. Please be sure to subscribe to our podcast and sign up for our weekly newsletter, ESG Insider. See you next time.

Copyright ©2024 by S&P Global  

This piece was published by S&P Global Sustainable1, a part of S&P Global.     


By accessing this Podcast, I acknowledge that S&P GLOBAL makes no warranty, guarantee, or representation as to the accuracy or sufficiency of the information featured in this Podcast. The information, opinions, and recommendations presented in this Podcast are for general information only and any reliance on the information provided in this Podcast is done at your own risk. This Podcast should not be considered professional advice. Unless specifically stated otherwise, S&P GLOBAL does not endorse, approve, recommend, or certify any information, product, process, service, or organization presented or mentioned in this Podcast, and information from this Podcast should not be referenced in any way to imply such approval or endorsement. The third party materials or content of any third party site referenced in this Podcast do not necessarily reflect the opinions, standards or policies of S&P GLOBAL. S&P GLOBAL assumes no responsibility or liability for the accuracy or completeness of the content contained in third party materials or on third party sites referenced in this Podcast or the compliance with applicable laws of such materials and/or links referenced herein. Moreover, S&P GLOBAL makes no warranty that this Podcast, or the server that makes it available, is free of viruses, worms, or other elements or codes that manifest contaminating or destructive properties.