ADGM Begins Implementation of Regulatory Framework for Sustainable Finance

Finance


ABU DHABI – Abu Dhabi Global Markets (ADGM) today announced the immediate implementation of its Sustainable Finance Regulatory Framework following significant support gained through public consultations, becoming a leading sustainable finance hub and sustainable finance activity strengthened its position as the natural hub of

The framework includes rules for sustainability-oriented investment funds, managed portfolios and bonds, as well as environmental, social and governance (ESG) disclosure requirements by ADGM companies. The measure will accelerate the growth of a sustainable financial ecosystem in the jurisdiction and support the UAE’s transition to net zero greenhouse gas emissions.

Green and Climate Change Funds and Portfolios, Green and Sustainability Bonds and Sukuk Frameworks are important steps in enabling capital to be channeled to finance the transition to net zero.

To recognize products and services that support the transition, ADGM gives designations to products and services that it claims meet its robust minimum standards. You are also permitted to use ADGM’s Designated Marks in marketing materials and customer communications. The Designated Mark gives investors a level of confidence that their products and services meet ADGM’s minimum standards and motivates them to direct their funds towards the green transition.

The ADGM’s focus on stakeholder engagement has resulted in a Feedback Statement that reflects the meaningful feedback received and addresses key issues raised through its response to the Consultative Papers and engagement with relevant stakeholders. was also issued.

Overwhelming support for the proposal from industry, including stakeholders who have indicated plans to launch products under the proposed framework, has led to one of the region’s first and most comprehensive sustainable financial frameworks. It embodied the ADGM’s intention to move forward.

This feedback statement not only reflects how industry engagement helped shape the framework implemented, but also the implementation that ADGM will implement in 2025 as part of its further development and development efforts. It also provides a clear indication of the areas to be explored in later reviews. Going forward, we will improve the regulatory framework. ADGM will continue to rely on input from stakeholders to shape its ecosystem into a world-class hub for sustainable finance and a key enabler to advance the UAE’s net-zero strategic initiative.

This framework and its stakeholders are further supported by knowledge acceleration initiatives such as the Graduate School of Sustainable Finance and the Research Center of the ADGM Academy.

Dr Sultan bin Ahmed Al Jaber, Minister of Industry and Advanced Technologies and nominated COP28 President, said: The lack of available, accessible and affordable finance jeopardizes global climate goals and sustainable development, and addressing this issue is one of the top priorities of the COP28 presidency. To move the transformation forward, we need to shift gears to mobilizing private capital. “

“ADGM is highly commendable for advancing such an important initiative and striving to establish a global hub for sustainable finance. It will play a key role in mobilizing funds for the net-zero transition, enabling increased green trading by local and global financial institutions,” he added.

“We also welcome the ongoing work of the Sustainable Finance Working Group, chaired by ADGM and comprised of UAE regulators, federal ministries and exchanges. steps to call for sustainability-focused corporate governance and the development of a green taxonomy for the UAE,” he continued.

“Finance is the key to turning good intentions into real results. “There is a need for initiatives such as the finance regulatory framework,” Dr. Al Jaber concluded.

“In the year the UAE hosts COP28, ADGM is in line with the actions of the country’s leaders who proudly declared this year the year of sustainability,” said ADGM Chairman Ahmed Jassim Al Zabi. commented. We believe our regulatory framework on sustainable finance is the most comprehensive in the Middle East and South Asia region and rivals the most comprehensive regulatory frameworks in the world in scope and content. “

“Our requirements, particularly those that set minimum standards for products and services with a focus on sustainability, will help direct capital towards projects and activities that advance the country’s transition to net zero. We appreciate market participants’ feedback, which reflects the excellent relationship between ADGM and its stakeholders in our sustainable finance ecosystem. Their engagement will continue to be essential as we actively support the progress of the UAE and the continued development of Abu Dhabi’s Green Falcon economy,” he added.

The new Sustainable Finance Regulatory Framework is further supported by several ongoing ADGM initiatives, including the Abu Dhabi Sustainable Finance Declaration, which has over 100 signatories, and the ADGM Academy’s School of Sustainable Finance. Regulatory changes to the capital markets framework last year by the ADGM FSRA introduced environmental products as a type of financial instrument and placed carbon offsets under its regulatory framework, creating the world’s first regulated voluntary carbon exchange platform. AirCarbon Exchange will be established. financial center.

These strategic efforts, combined with a sustainability-focused fund, portfolio, fixed income and sukuk regulatory framework, as well as ESG disclosure and carbon offset regulatory requirements, distinguish ADGM as a leading hub for sustainable finance.



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