R.A.C.E - Climate Regulations

foreign [Music] says distinguished guests ladies and gentlemen we've heard a lot of excellent um speeches so far so I'll do my best to contribute as well here at adgm we believe we have a pivotal role to play in furthering the UA's National efforts to achieve a transition to net zero emissions by 2050. sustainability is a key priority for idgm and therefore it is my pleasure to speak to you today about our contribution to race towards net zero we're all now aware particularly as cop27 comes to an end that the green transition requires funding and the capital expenditure required cannot come from the public sector alone the green financing Gap it's estimated to be 2.5 trillion US dollars per annum just in emerging economies alone to bridge that Gap we're going to require a collective effort from all sectors of the economy both public and private this is where the role of an International Financial Center such as adgm plays a critical role by bringing the demand for and supply of Finance together our robust and Progressive world-class legal and Regulatory framework makes adgm a destination of choice for issuers and investment vehicles to raise capital our location set within a thriving economy at the meeting point of east and west provides us an enviable proximity to the flourishing markets of the Middle East North Africa south Asia even Europe and Beyond this is why adgm matters when it comes to achieving Net Zero with that in mind I'd like to provide you with an overview of our journey so far the foundations we've built and the exciting developments that we see ahead it's a journey that has already become the first where we've become the first International Financial Center to become carbon neutral in 2021 to host the world's first regulated voluntary carbon exchange and Clearinghouse our journey hasn't just started today or yesterday it started a long time ago and for adgm in particular we kicked it off in January 2019 when we published our sustainable Finance agenda that agenda had four pillars those pillars were regulation awareness cooperation ecosystem race since 2019 adgm has delivered on various measures under each of those pillars and I'm only I'm going to briefly touch on each today because there's a lot more I could say and I don't want to take up too much of your time but on regulation we all know Finance is about trust and sustainable Finance is no different if investors can't trust green credentials of investment products they are offered in other words if they are too wary of green washing they are going to be reluctant to invest this reluctance starves the green transition of needed Capital which is required to make Net Zero a reality that is why we have gone about establishing a regulatory framework not only for carbon markets in environmental instruments for carbon offsets and credits but also rules and regulations on green investment products and services which is crucial to investor confidence next is awareness in order to build that awareness in 2019 we've hosted Abu Dhabi sustainable Finance Forum part of the Abu Dhabi sustainability week the Region's principal sustainability conference adgm has also developed the adgm sustainable Finance platform an online solution which importantly looks at ESG data published by companies in the region this platform supports the local and International Drive towards increased transparency in sustainability by enabling users to access and compare companies ESG data next we have cooperation and we've heard a lot about cooperation and collaboration to date so far and we'll hear a lot more we've been a protagonist in fostering collaboration with public and private stakeholders achieve synergies and Advance sustainable Finance together with a panel of leading UAE authorities and financial regulatory bodies and exchanges adgm helped establish the sustainable Finance working group to support this collaboration in November 2021 the working group published its high-level statement outlining how members of that particular working group and more widely will each Implement regulatory measures to contribute to sustainability and only last week that same working group during cop 27 published an update on its efforts in this space including very importantly the group's ongoing collaboration to develop a green taxonomy for the UAE furthermore the Abu Dhabi sustainable Finance declaration a collaborative framework launched in 2019 by adgm in collaboration with the ministry of climate change and environment the UAE Central Bank Securities and commodity Authority and others now has 80 plus signatories all committed to its goals the declaration has been signed by public and private sector entities and today we will be welcoming a number of new signatories moving on finally to ecosystem the fsaras and the process of us facilitating the establishment of the first regulated voluntary carbon exchange and Clearinghouse we're doing so by enabling carbon offsets and credits to be treated as regulated financial instruments this will be an important tool to help organizations whether in the public or private sector to offset their emissions as one tool only one to achieve carbon neutrality there are many others of course while never forgetting the need to reduce emissions before they occur we've all seen retail investment managers starting to offer portfolio management that targets investment in assets that contribute to the green transition and to continue to nurture this growth of green products and services in our ecosystem last week we issued a consultation paper on a new regulatory framework for sustainable Finance this provides structure against which products and services such as these can continue to grow I will take this opportunity now to briefly outline what was in that consultation paper the proposals create regulatory Frameworks for four types of sustainability focused investment products these are investment funds managed portfolios green bonds and greens to Cooks our proposals on investment funds Encompass the Region's first regulatory framework for green investment funds to channel Capital towards environmentally sustainable activities we have Incorporated measures that require the use of third-party definitions for green such as published grain taxonomies that are internationally recognized as an objective measure to harness investor trust and protect against brainwashing we have all we have also proposed a truly Innovative framework in what we call climate transition funds importantly These funds will not invest in already pure green assets why is that important if we're going to get to Net Zero we must facilitate the movement of capital and assets that are not currently environmentally sustainable but are on a journey to get there this is an essential component of the transition to Net Zero as a great majority of investable assets are not currently green and we have to find a way to divert Capital to them in order they can become green we're the first mover an innovator in creating this type of framework these green and climate transition investment types have been expanded in our framework to manage portfolios for retail clients enabling investment managers to offer to manage client Savings in a way that channels their savings towards the transition to Net Zero We Believe investors will orientate towards managers that adopt these standards in turn increasing the assets under management and thus increasing Investments towards green transition it's a regulatory framework we believe is a win-win for all involved further our green investment proposals Encompass a framework for green and sustainably linked bonds again with an externally verifiable standard set against which the instruments will need to comply to ensure investor confidence in the offering grain bonds are an important source of financing for both the public and private sectors and part of the transition effort a sizable marketing green bonds already exists globally and adgm is already a location for of choice for entities to issue bonds and secooks our vision is to expand adgm's offering into a center of green bonds answer cooks with both public and private companies establishing entities here to issue and to offer sustainable debt a framework doesn't stop there the additions to our legal framework will also Encompass the Region's most comprehensive framework in ESG Disclosure by a wide set of commercial entities based in the adgm esdg ESG disclosure are critical to ensuring companies accountable for their footprint on the environment society and their commitment to good governance that is why our consultation paper sets out a framework for any large ADM adgm based commercial entity to disclose its ESG data in an open transparent fashion it is the first time in the region that such a comprehensive regime has been proposed and aligns adgm and the UAE at the Forefront of what is becoming Global best practice naturally we have built in the necessary flexibility to help adgm companies adapt and transition to this new framework such as by starting with the comply or explain framework of disclosure however we have proposed in our consultation paper that Our intention is to move to a mandatory disclosure framework however that will happen when the time is right in conclusion we aim to become a location of choice for companies government entities and investment vehicles to raise Capital to fund green projects and activities within the UAE and Beyond and for environmentally conscious companies to demonstrate their commitment to the need to reach Zero by disclosing their impact on the environment and becoming carbon neutral these are significant Ambitions they will require commitment and and Endeavor just as achieving the net zero emissions will require commitment and Endeavor from us all many thanks for your time today Net Zero 2050 is a race it's a Race Against Time but it's also a race that all of us as individuals organizations and governments must participate thank you very much