ABU DHABI: Abu Dhabi Securities Exchange (ADX), one of the world’s fastest-growing markets, is delighted to announce the launch of its inaugural ESG (Environmental, Social, and Governance) benchmark index. This launch, ahead of COP28, marks a significant step towards advancing sustainable investment practices in the region.
The FTSE ADX ESG Screened index has been developed in collaboration with FTSE Russell. The index is designed to provide investors with a transparent and tradable ESG benchmark based on screening criteria and comprehensive methodology, that ranks a company based on its ESG scores.
In line with the UAE government’s objectives of its “Towards the next 50” agenda which aims to build a sustainable economy and position the UAE as the main gateway for global trade and investment, ADX’s ESG index will promote sustainable business practices among its listed companies, promote greater investments into responsible companies.
Abdulla Salem Alnuaimi, Chief Executive Officer of ADX, said: "The FTSE ADX ESG Screened Index is a strategic tool for companies on our exchange, championing sustainability measures and fostering growth opportunities. Investors benefit from reliable ESG data, enabling them to make informed decisions that continue to align financial success with environmental and social responsibility."
He added: "Building upon our ongoing commitment, this ESG Index will further bolster the diversification of the UAE economy, contributing to the sustainable growth of our nation and reinforcing our position as a global hub for responsible investment."
Fiona Bassett, Chief Executive Officer at FTSE Russell, commented, “Our collaboration with ADX to create the FTSE ADX ESG Screened Index is a testament to our dedication in enabling our customers and ADX investors to meet their sustainability goals. By utilizing ESG scores sourced from LSEG Data & Analytics, we aim to provide a transparent and objective measure of companies' ESG performance. This announcement aligns perfectly with our broader partnership with ADX, as we work together to deliver a world-class suite of indices that cater to the needs of both retail and institutional investors, locally and globally”.
The ESG index will initially include 24 companies that are listed on the ADX market and constituents of the FTSE ADX General Index. It is designed to measure relative ESG performance, commitment and effectiveness of a company factually and transparently, based on the publicly reported across number of themes including emissions, environmental product innovation, human rights, shareholders and others. It will be measured on annual basis.
ADX has a long history of supporting ESG and sustainability initiatives. This year, ADX played an important part within GCC Exchanges Committee in publishing a unified ESG Disclosure Metrics for GCC listed companies which includes 29 standards that are aligned with the World Federation of Exchanges and the United Nations Sustainable Stock Exchanges (SSE) initiative. ADX’s comprehensive ESG disclosure guidance for its listed companies is in alignment with the SSE initiative recommendations and provides companies with a set of KPIs aligned with its strategy that is designed to support economic growth, while providing a sustainable trading environment.
ADX also launched its first annual Sustainability Report in 2020, which has encouraged 100% of its listed companies to issue their own sustainability reports. In 2019, ADX signed the ‘Abu Dhabi Sustainable Finance Declaration’, which was initiated by Abu Dhabi Global Market (ADGM) as a united front to advocate sustainable finance and investments for the long-term growth of the UAE’s economy.
Furthermore, ADX has witnessed a surge in the number of green debt instruments listings on the Exchange.
Earlier this week ADX listed the first ever Dirham dominated Green Sukuk issued by First Abu Dhabi Bank (FAB) with a value of AED 1.3 billion. Last month, ADX welcomed the listing of a USD 750 million Green Bond by Abu Dhabi Future Energy Company (Masdar), following an earlier listing of green bonds valued at $1 billion by the Abu Dhabi National Energy Company (TAQA), and last year, Sweihan PV Power Company made a bond listing of US$700 million green bonds.
About Abu Dhabi Securities Exchange
Abu Dhabi Securities Exchange (ADX) was established on November 15 of the year 2000 by Local Law No. (3) Of 2000, the provisions of which vest the market with a legal entity of autonomous status, independent finance and management. The Law also provides ADX with the necessary supervisory and executive powers to exercise its functions. On 17th March 2020, ADX was converted from a “Public Entity” to a “Public Joint Stock Company PJSC” pursuant to law No. (8) of 2020. ADX is part of ADQ, one of the region’s largest holding companies with a broad portfolio of major enterprises spanning key sectors of Abu Dhabi’s diversified economy.
ADX is a market for trading securities; including shares issued by public joint stock companies, bonds issued by governments or corporations, exchange traded funds, and any other financial instruments approved by the UAE Securities and Commodities Authority (SCA).
ADX is the second largest market in the Arab region and its strategy of providing stable financial performance with diversified sources of incomes is aligned with the guiding principles of the UAE “Towards the next 50” agenda. The national plan charts out the UAE’s strategic development scheme which aims to build a sustainable, diversified and high-value added economy that positively contributes to transition to a new global sustainable development paradigm.
- Abdulrahman Saleh ALKhateeb
- Manager of Corporate Communication & Digital Marketing
- Email: ALKhateebA@adx.ae
About FTSE Russell, an LSEG business
FTSE Russell is a global index leader that provides innovative benchmarking, analytics and data solutions for investors worldwide. FTSE Russell calculates thousands of indexes that measure and benchmark markets and asset classes in more than 70 countries, covering 98% of the investable market globally.
FTSE Russell index expertise and products are used extensively by institutional and retail investors globally. Approximately $20.1 trillion is currently benchmarked to FTSE Russell indexes. For over 30 years, leading asset owners, asset managers, ETF providers and investment banks have chosen FTSE Russell indexes to benchmark their investment performance and create ETFs, structured products and index-based derivatives.
A core set of universal principles guides FTSE Russell index design and management: a transparent rules-based methodology is informed by independent committees of leading market participants. FTSE Russell is focused on applying the highest industry standards in index design and governance and embraces the IOSCO Principles. FTSE Russell is also focused on index innovation and customer partnerships as it seeks to enhance the breadth, depth and reach of its offering.
FTSE Russell is wholly owned by London Stock Exchange Group.
For more information, visit FTSE Russell.
- Tarek Fleihan
- Global Communications, LSEG
- Email: firstname.lastname@example.org