An interview with Ahmed Abdelaal, Group CEO Mashreq

In the face of mounting climate change challenges, banks like Mashreq are redefining their role as not only financial institutions but also as agents of sustainability. Mashreq, one of the UAE’s best performing banks for over five decades, is a leading financial institution with an expanding footprint across the Middle East and North Africa, and a strong presence in the financial capitals of the world.

Group CEO Ahmed Abdelaal sheds light on how Mashreq is leveraging transparent ESG disclosures to foster trust and spearhead sustainable banking practices within the region.

1. How is your organization approaching climate change?

In a world facing significant challenges derived from climate change, the role of banks in driving sustainability and facilitating climate action has become crucial. A fundamental aspect of the banking sector's commitment to advancing sustainability is the transparent disclosure of ESG factors. This transparency is the bedrock upon which trust with stakeholders is built and credibility is established, acting as a catalyst for the adoption of sustainable banking practices.

Mashreq is actively prioritizing the transparent disclosure of ESG factors to build trust and credibility, which are an essential part of sustainable banking practices. We have been publishing sustainability reports since 2020, demonstrating our dedication to achieving sustainability-related targets and objectives.

In addition, Mashreq is ramping up efforts to provide sustainable financing over the next seven years, with a plan to increase the $20 billion worth of sustainable finance it has facilitated by the end of H1 2023 to reach $30 billion by 2030. We are firmly committed to contributing to the advancement of Net Zero efforts and uptake across the region. Alignment with national and regional frameworks, as well as global environmental initiatives, is a moral and ethical imperative for Mashreq as one of the leading banks in the region.

2. What’s your top best practice to solve the climate crisis?

To address the climate crisis effectively, we recognize that working closely with our clients is pivotal. We provide advisory services to guide them in transitioning to more sustainable practices, managing associated risks, and accessing tailored sustainable financing solutions. Our commitment extends beyond typical financing; it encompasses capital expenses, operational costs, and even extends to initiatives like employee retraining and brand awareness. We believe that supporting our clients comprehensively is essential for sustainable progress.

As for our top best practice to mitigate the climate crisis, we are focused on addressing the indirect impact of our financing and investment activities. Mashreq is actively developing a Sustainable Financing Framework designed to enable the issuance of a range of instruments collectively known as "Sustainable Finance Instruments," which includes green, social, and sustainability bonds. It's a proactive approach to engage stakeholders, seamlessly integrate ESG criteria into our lending and investment processes, and continually refine our understanding and integration of sustainability principles.

Additionally, we champion innovative financing solutions, such as sustainability-linked loans (SLLs), to actively engage stakeholders and incentivize companies to align their financing objectives with their sustainability goals.

3. How is your organization engaging local stakeholders in your climate actions?

We are firmly committed to contributing to the advancement of climate action in the UAE and across the MENA region. We believe that alignment with national and regional frameworks, as well as global environmental initiatives, must become a moral and ethical imperative for the banking sector.

As a bank, we believe we can make the biggest difference through our ability to engage stakeholders across the public and private sectors and to direct capital flows and provide our clients with solutions that go beyond the realm of financing. We recognize that public-private partnerships also hold immense importance. They empower countries to attract capital by fostering favorable policies, legal frameworks, currency stability, and the availability of advanced technologies. We support and encourage collaboration between the private sector and government institutions to accelerate the transition to sustainable energy projects.