• The Middle East & Africa region to take centre stage at COP27 in Egypt, and COP28 in UAE

Abu Dhabi, UAE – International banking group BNP Paribas and Abu Dhabi Global Market (ADGM) co-authored a white paper entitled “UAE and the Energy Transition: Towards COP28”. The paper formalised the discussion of a number of prominent business leaders based in the UAE who attended a roundtable on the topic in November 2021.

Collectively, the session included the exploration of key areas of climate action including effective regulation, stronger collaboration, wider stakeholder engagement and the increasing role of the financial industry in the region's climate action. The participants also reflected on the agreements made during COP26 in Glasgow last year, and recommended stronger public-private collaboration ahead of the UAE’s hosting of COP28, to achieve ambitious net-zero targets.

Jerome Ponrouch, Head of Company Engagement CIB MEA commented “BNP Paribas is proud to partner with ADGM to engage with key regional stakeholders on the energy transition and the path to net-zero. When it comes to climate action, a critical juncture was reached at COP26.  As a responsible bank, it is important to share our knowledge and experience of sustainability and sustainable finance to engage more partners. Although somehow distant, we want COP28 to encapsulate not only the progress of prior COPs, but also to include more diverse stakeholders in the planning and delivery of a sustainable future for the planet.”

Mercedes Vela Monserrate, Head of Sustainable Finance at Abu Dhabi Global Market said: “The UAE’s hosting of the COP28 next year will be an important determinant of the impact of our efforts to decarbonise our economy. Our discussion with BNP Paribas, as well as with other private sector partners, set the scene for a more collaborative approach to clearly defining how to achieve net-zero goals. We should continue to integrate the private sector into our transition strategy, and set clear, actionable plans in line with global standards.”

Top findings from the white paper include:

Increased focus on public-private sector collaboration

Although COP26 was generally positive from a regional perspective, global negotiations were largely referred to as “fragile agreements.” One of the main reasons given for this, was the lack of consultation with some stakeholders such as the private sector—which was left out of crucial negotiations.

As such, one of the key recommendations of the roundtable is to encourage stronger collaboration between the public and private participants, and to set clear, credible, and timely plans to deliver on net-zero targets.  Accelerating the decarbonisation of the economy is a vital part of climate mitigation, with over 70% of global emissions created by industry.

Regulation and communication

Governments and regulators play an important role in ensuring effective reporting of climate action. Rules and guidelines must be clear and achievable in order to make actors more accountable and reduce the risk of greenwashing.

Effective communication plays a pivotal role in ensuring alignment and informing the public about the impact of climate change. Engagement includes politicians, business people, civic society and the general public. Increased disclosure was also identified as a key enabler of progress for COP28, with access to information on topics such as national and international climate change priorities seen as fundamental to accountability.

Financing & Inclusivity

Finance and sustainability go hand-in-hand. If climate change projects do not meet the requirement of private finance, then sustainable finance will be hard to scale up, unless subsidies, guarantees or other incentives are offered by governments and supernational entities, like multilateral development banks.

The question of where financing the transition comes from is critical. There should be a toolkit available, including government incentives, support from regional SWFs, ESG dedicated financial institutions and a carbon tax scheme supported by an active carbon credit trading market. There are also key questions pertaining to each economic activity. Foster change in the behaviour of consumers and users is also important because both the supply and the demand matter in the transition at stake. 

Whilst the financial market, lending and investment are switch mechanisms; regulators and the financial sector must ensure that they match the pace of participants in the economy. They must collaborate with companies in developing a mutually acceptable path to sustainability, accompanying companies and individuals on their transition journey. 

As a special guest at the roundtable, BNP Paribas’ Global Sustainability Partner Craig Leeson came directly from COP26 to Abu Dhabi to participate and lead the discussion on the energy transition and practical actions to achieve it. Craig is also an award winning journalist, filmmaker , his most recent films are “A Plastic Ocean” and “The Last Glaciers.” The conversation was a review of COP26’s outcomes, looking forward to the UAE’s own commitments, the path to COP28 and the key challenges and opportunities lying ahead.

ADGM will continue to host knowledge sharing activities with key stakeholders in the UAE in the lead up to COP28.

To read the white paper “UAE and the Energy Transition: Towards COP28” click here.

-Ends-

About Abu Dhabi Global Market (ADGM)

Abu Dhabi Global Market (ADGM), an international financial centre (IFC) located in the capital city of the United Arab Emirates, opened for business on 21 October 2015. Established by a UAE Federal Decree as a broad-based financial centre, ADGM augments Abu Dhabi’s position as a global trade and business hub serving as a strategic link between the growing economies of the Middle East, Africa and South Asia and the rest of the world.

ADGM’s strategy is anchored by Abu Dhabi’s key strengths spanning over private banking, wealth management, asset management, derivatives and commodities trading, financial innovation, sustainability and more. Comprising three independent authorities: ADGM Courts, the Financial Services Regulatory Authority and the Registration Authority, ADGM as an IFC governs the entire 114 hectares (1.14sqkm) of Al Maryah Island which is a designated financial free zone.

It enables registered financial and non-financial institutions, companies and entities to operate, innovate and succeed within an international regulatory framework based on common law. Since its inception, ADGM has been awarded the “Financial Centre of the Year (MENA)” for four consecutive years for its initiatives and contributions to the financial and capital markets industry in the region.*

For more details on ADGM, please visit www.adgm.com or follow us on Twitter and Instagram: @adglobalmarket and LinkedIn: @Abu Dhabi Global Market (ADGM)

* Source: The Global Investor Middle East and North Africa (MENA) Awards

 About BNP Paribas

BNP Paribas is a leading bank in the Eurozone and a prominent international banking institution. It has a presence in 65 countries, with more than 190,000 employees. The Group has key positions in its three main activities: Domestic Markets, International Financial Services and Corporate & Institutional Banking. The Group helps all its clients to realise their projects through solutions spanning financing, investment, savings and protection insurance. In its Corporate & Institutional Banking and International Financial Services activities, BNP Paribas also enjoys top positions in Europe, a strong presence in the Americas, as well as a solid and fast-growing business in Asia-Pacific.

 BNP Paribas has been operating in the MEA region for over 45 years, where it is active in the fields of Corporate & Institutional Banking and International Financial Services. The Bank has a presence in five of the Gulf countries: Bahrain, Kuwait, Qatar, Saudi Arabia and the United Arab Emirates. The BNP Paribas Group in South Africa is represented by a full commercial branch in Johannesburg and BNP Paribas Personal Finance Ltd. (RCS) a consumer finance company based in Cape Town. BNP Paribas is also present in Morocco through the BNP Paribas Regional Investment Company (BRIC), which acts as a hub for wider Africa.