UAE -  Mashreq, a leading financial institution, has signed a Memorandum of Understanding (MoU) with the UAE-based fintech firm, Fils, to develop a corporate carbon offsetting offering. This helps corporate and institutional clients to integrate carbon offsetting directly from their Mashreq corporate accounts.

Fils is a groundbreaking, enterprise-grade, digital platform that provides the underlying infrastructure for financial institutions, banks and other organisations across industries to launch standalone, sustainable focused products such as carbon offsetting.

This approach to the future of fintech facilitates the transition to an Environmental, Social, and Corporate Governance (ESG) compliant corporate landscape, enabling companies of all sizes to effortlessly embed sustainable and climate action into their business models and customer journeys, across industries.

Blockchain technology

In a bid to eliminate the deceptive practice of misrepresenting environmental responsibility through greenwashing, Fils infrastructure uses blockchain technology to track all carbon credits used to avoid double counting and provide transparency.

The MoU was signed at Mashreq’s Global HQ by Nameer Khan, founder of Fils; and Mashreq’s Head of Corporate and Investment Banking Group, Joel D Van Dusen, with the support of the UAE’s Chief Trade Negotiator and Assistant Undersecretary for International Trade Affairs at the Ministry of Economy, Juma Al Kait.

The agreement represents the first step in Mashreq’s development of specialised carbon-offsetting financial products, which will launch in collaboration with selected UAE-based Mashreq corporate clients.

With the initial solution expected in the first half of 2024, the announcement represents a critical milestone for the region’s financial sector, underlining a significant shift towards incorporating environmental responsibility within the region’s financial practices.

Carbon credits

Within the UAE, carbon credits are an increasingly important part of the decarbonisation strategy. The partnership between Mashreq and Fils will create a solution that solves a number of historic challenges, including the fact that trading markets are not typically accessible directly by corporates.

The account will also solve the problem of minimum purchase amounts that typically apply, whereas Fils will provide fractionalised credits. This removes the complexity and accessibility of dealing directly with the carbon credit markets and simplifies the purchasing, auditing, and reporting through Mashreq.

Joel D Van Dusen, Head of the Corporate and Investment Banking Group at Mashreq, said: "This initiative will have a broad impact on Mashreq's corporate clients, offering a solution designed to contribute towards environmental sustainability. It also reinforces the UAE’s position as a pioneer in integrating sustainability into its economic and financial sectors, aligning with the nation's role in hosting COP28 and its ambition to lead global sustainability efforts. Furthermore, the pioneering initiative signifies Mashreq’s dedication to sustainable practices.”

Climb2Change

The MoU with Fils is the newest addition to Mashreq's series of sustainable finance initiatives, forming part of the bank's wider global Environmental, Social, and Governance (ESG) platform, Climb2Change. The international initiative integrates the Bank’s wide ranging ESG milestones with its contribution to shaping a sustainable future and the financial solutions required to combat climate change and achieve an inclusive net zero future.

Nameer Khan, Founder of Fils, said: “Fils’ partnership with Mashreq in the development of a ground-breaking carbon offsetting product is a powerful catalyst for the evolution of ESG enforcement across the region’s financial markets. Created with transparent KPIs, the accounts spell the end of greenwashing and clear a path towards greater accountability and implementation of actionable outcomes that can improve the sustainability of the world we live in.”

Founded by Mena Fintech Association (MFTA) chairman Nameer Khan, Fils aims to enable companies to integrate ESG values at the heart of their operations. 

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