Home » Blog » Sustainable Finance and Green Banking Initiatives in Dubai

Sustainable Finance and Green Banking Initiatives in Dubai

Why Dubai is emerging as a sustainable finance hub

Dubai’s clean-energy ambition and federal Net Zero policy create long-term demand for climate finance. The Dubai Clean Energy Strategy 2050 targets 75% clean power by 2050, while the UAE’s Net Zero 2050 strategy frames economy-wide transition pathways. Together, these targets pull capital toward renewables, efficiency, low-carbon transport, green buildings, circular economy projects, and nature-positive investments.

Signal from lenders: UAE national banks, through the UAE Banks Federation, have pledged over AED 1 trillion (≈US$270bn) in sustainable finance by 2030—an anchor commitment that supports project pipelines and corporate transitions.2030

Regulatory & policy landscape

1) DFSA & DIFC: supervisory roadmap and incentives

The Dubai Financial Services Authority (DFSA) launched a Sustainable Finance Roadmap 2021–2024 for firms in the Dubai International Financial Centre (DIFC). The DFSA also waived regulatory fees for sustainability-related debt listings on Nasdaq Dubai during 2024—lowering issuance costs for green, social, sustainability and sustainability-linked (GSSS) instruments.

2) UAE Sustainable Finance Working Group (SFWG)

Since 2019, the SFWG—bringing together the Central Bank, DFSA, SCA, ADGM FSRA, exchanges and federal ministries—has issued high-level Guiding Principles on Sustainable Finance and, in 2023–2024, Principles for Sustainability-Related Disclosures to improve transparency and comparability of ESG data across the financial system.

3) Central Bank of the UAE (CBUAE): climate-risk expectations

CBUAE’s Rulebook sets out principles for the effective management of climate-related financial risks. Banks are expected to integrate physical and transition risks into governance, strategy, risk appetite, scenario analysis, stress testing and ICAAP/ILAAP processes. For boards and CROs, this effectively turns climate into a mainstream prudential risk topic.

Market infrastructure & listings

Nasdaq Dubai ESG Bonds & Sukuk

Nasdaq Dubai operates a dedicated segment for ESG-labelled bonds and sukuk, making Dubai a regional hub for sustainable debt. A milestone came when Dubai Islamic Bank (DIB) listed the UAE’s first sustainable sukuk (US$750m) in December 2022—demonstrating investor appetite for Sharia-compliant sustainable instruments.

Dubai Green Fund (DGF)

Initiated by the Dubai Supreme Council of Energy and supported by DEWA, the Dubai Green Fund was created to catalyse investment into clean energy and efficiency via concessional lending and impact capital. DGF’s mandate is to accelerate bankable green projects and crowd-in private lenders.

What leading banks are doing

Emirates NBD

Emirates NBD’s Sustainable Finance Framework (2023) aligns with ICMA and LMA principles, enabling issuance of green, social and sustainability-linked instruments and on-balance-sheet green lending. The bank also publishes TCFD-aligned reporting and ESG policies.

Dubai Islamic Bank (DIB)

DIB’s Sustainable Finance Framework (with an ISS ESG second-party opinion) defines eligible green and social categories for sukuk and financing. In 2025, DIB also published a Sustainability-Linked Finance Facilities Framework to tie funding costs to measurable KPIs.

Mashreq

Mashreq has expanded green loans and sustainability-linked structures for corporates and project sponsors, and markets dedicated solutions spanning green DCM, supply-chain finance and Islamic formats. Selected retail propositions—like green home loans—signal mainstreaming on the consumer side.

Green products for consumers & SMEs

  • Electric & hybrid vehicle finance: Products such as the Emirates NBD Green Auto Loan and DIB’s EVolve auto finance incentivise low-emission transport.
  • Green mortgages: Banks like Mashreq promote green home loans for certified efficient buildings.
  • SME retrofits: Frameworks at major banks allow lending for energy-saving upgrades (HVAC, solar rooftops, lighting) under “eligible green” categories.

How to access green capital in Dubai

For corporates & project sponsors

  1. Define the use of proceeds & KPIs: Map your project(s) to recognised categories (renewables, energy efficiency, green buildings, clean transport, water, circular economy, social inclusion).
  2. Choose the instrument: Green/sustainability bonds or sukuk, sustainability-linked loans, green term loans, or blended structures with DFIs/export credit agencies.
  3. Draft a Finance Framework: Align with ICMA and LMA principles; obtain an external review (SPO/verification).
  4. Leverage Dubai’s markets: Consider listing on Nasdaq Dubai’s ESG segment for visibility and benchmark pricing.
  5. Embed disclosure & risk: Align reporting with the UAE SFWG’s disclosure principles and CBUAE climate-risk expectations (governance, stress testing, ICAAP/ILAAP).
  6. Explore catalytic capital: Engage the Dubai Green Fund and partner banks for blended terms, especially for first-of-a-kind projects.

“`

For banks & NBFIs

  • Integrate climate risk into enterprise risk management and board oversight per the CBUAE Rulebook.
  • Develop a labelled-asset pipeline (renewables, retrofits, EV ecosystem, green logistics, water, waste) and set internal taxonomies consistent with UAE principles.
  • Scale retail green products (EV, solar rooftop, efficient appliances) to build public participation in the transition.

FAQs

What’s the difference between a green bond and a sustainability-linked bond?

Green bonds/sukuk earmark proceeds for eligible green/social projects. Sustainability-linked instruments finance general purposes but adjust pricing to KPI performance (e.g., emissions intensity), creating incentives to meet targets.

Is there a local taxonomy?

The UAE SFWG has prioritised a national sustainable finance taxonomy; interim disclosure principles (and international taxonomies like EU/ASEAN) are commonly referenced by issuers and lenders while local standards evolve.

Can Islamic finance be green?

Yes. Green sukuk and sustainability-linked Islamic facilities are growing fast in Dubai. Sharia principles align well with stewardship, transparency and real-economy assets—making labelled Islamic instruments a natural fit for transition finance.

Key official sources & examples

Tip: When citing on your site, link directly to regulator and bank pages (above) to help readers verify claims and to reinforce E-E-A-T signals for SEO.

Related Posts

Scroll to Top