DIFC presents innovative sustainable finance framework

Dubai International Financial Center (DIFC), the leading global financial center in the Middle East, Africa and South Asia (MEASA) region, today announced its Sustainable Finance Framework (“The Framework”), published in September 2023 with a positive review of the Second Party Opinion by S&P Global Ratingswhich establishes fundraising principles for investments in its environmental and social projects that enable sustainable business operations.

Globally, it is estimated that between $3.3 and $4.5 trillion per year are needed to achieve the 2030 Agenda for Sustainable Development. This has boosted the sustainable debt market, which has been growing at a rapid pace driven by strong investor demand and growing expectations that governments and organizations will deliver on their sustainability commitments.

DIFC continues to support the growth of the sustainable debt market within Nasdaq Dubai. As of September 2023, DIFC’s Nasdaq Dubai is the world’s largest ESG sukuk market, accounting for approximately 64 percent of the world’s dollar-denominated sustainable sukuk ($16.4 billion of $25.8 billion) and 46 percent of all global sukuk. -sustainable sukuk currencies ($17.5 billion out of $38.3 billion).

S&P Global Ratings’ Second Party Opinion (SPO), appointed to review the DIFC’s Sustainable Finance Framework, provided “strong” opinions on its project evaluation and selection process; and reporting. The OPP provides aligned opinions on the use of revenue and evaluation of the framework.

According to S&P Global, the DIFC Sustainable Finance Framework is also aligned with international standards including:

• Social Bond Principles (SBP), ICMA, 2023
• Social Lending Principles (SLP), LMA/LSTA/APLMA, 2023
• Green Bond Principles (GBP), ICMA, 2021 (with Appendix 1 June 2022)
• Green Lending Principles (GLP), LMA/LSTA/APLMA, 2023
• ICMA Sustainable Bond Guidelines, 2021

The framework further aligns with DIFC’s Strategy 2030 to drive the future of finance; with the Dubai Economic Agenda D33 drive economic growth, innovation and promote environmentally friendly and energy efficient companies; and with him UAE Sustainable Goals 2030.

Announcing the news at the inauguration. Future Sustainability Forum today, His Excellency Essa Kazim, DIFC Governorcommented:

“DIFC strives to further scale its status as a Global Center for Sustainable Finance, underpinned by its Strategy 2030, with the aim of investing in the growth of sustainable finance in Dubai. To enable this, we are leading several initiatives, such as being the first Global Financial Center in the region to publish our Sustainable Finance Framework, a positive Second Party Opinion review by S&P Global Ratings. The framework will help raise capital for sustainable and impact-driven projects within and within the Centre, as we continue to lead the way on sustainable finance in the region.”

As the UAE prepares to host the UNFCCC Conference of the Parties (COP28), the one-year meeting of the DIFCRoad to COP28′ program, taught in collaboration with the Global Ethical Finance Initiative‘s (GEFI), has been gaining momentum on the critical role of finance in addressing global sustainability challenges ahead of COP28.

As a leading global financial centre, DIFC’s Sustainable Finance Framework demonstrates action and further aligns with the United Nations Sustainable Development Goals, which require consistent financial flows to enable sustainable development.

Additionally, DIFC continues to lead a range of comprehensive sustainability programs in the pursuit of a net zero future, including its chairmanship of the Dubai Sustainable Finance Working Group (DSFWG), established in 2019.

DIFC obtained guidance from Standard Chartered Bank in developing the Sustainable Finance Framework.

News source: Dubai Press Office