DUBAI: The UAE has strengthened its global leadership in green finance and sustainable development, rolling out strategic policies to boost investment in sustainable projects and promote innovation in the sector. The country is recognised as a regional model in the Middle East for its regulatory framework supporting green finance, enhancing its position as a global hub for sustainable investment and attracting international capital.

Bashar Al-Natoor, Global Head of Fitch Ratings’ Islamic Finance Group, highlighted the UAE's progress in Environmental, Social, and Governance (ESG) sukuk, a vital part of the country's green growth strategy. According to Fitch Ratings, the value of outstanding ESG sukuk in the UAE reached approximately US$9.1 billion by Q3 2024, representing a 43 percent year-on-year (YoY) growth. Furthermore, the UAE’s total ESG bond portfolio, valued at $13.4 billion, reflects a 59 percent YoY increase, with ESG sukuk forming 40.6 percent of this portfolio.

ESG sukuk now constitute around 15.6 percent of the UAE’s overall sukuk issuance as of Q3 2024, up from 12.7 percent YoY. The UAE also holds a significant 47 percent share of the Gulf Cooperation Council countries' ESG sukuk market, underscoring its leading role within the region. Globally, the UAE ranks second after Malaysia, accounting for 20.5 percent of all ESG sukuk worldwide, reaffirming its role as a key player in sustainable finance.

Moreover, the UAE has committed to mobilising AED1 trillion by 2030 to finance sustainable projects, supporting its vision to become a regional leader in sustainability and innovation. This aligns with a broader commitment to resilience and sustainable economic growth in the face of future challenges, as confirmed by PwC's findings.