ADIB’s $4.63B Green Finance Portfolio Makes Regional History
Abu Dhabi Islamic Bank leads the region’s green sukuk market with $4.63bn in sustainable finance, showing its record-breaking dedication to environmental sustainability. The bank allocated AED 17.3 billion (USD 4.7 billion) to reach its AED 60 billion sustainable finance target by 2030. This achievement puts ADIB at the forefront of Islamic sustainable finance in the Middle East.
ADIB stands out as the region’s first Islamic bank to share its interim 2030 financed emissions reduction targets. The bank’s first Green Sukuk showed its environmental focus, with 90% of funds going to renewable energy, energy efficiency, and sustainable water infrastructure projects[-3]. These initiatives helped ADIB avoid an estimated 607,000 tons of annual emissions[-3]. The bank’s own environmental impact improved too, with an 87% drop in Scope 1 emissions compared to 2022[-3].
ADIB mobilizes $4.63B in sustainable finance milestone
Image Source: Arabian Business
“Our latest sustainability disclosures reflect our steadfast commitment to ethical, inclusive, and climate-aligned banking.” — Mohamed Abdelbary, Group CEO, Abu Dhabi Islamic Bank (ADIB)
Abu Dhabi Islamic Bank (ADIB) has reached a significant milestone in its sustainability experience. The bank has helped secure AED 17.3 billion (USD 4.63 billion) in sustainable finance to date. This achievement brings ADIB closer to its ambitious target of mobilizing AED 60 billion by 2030. The bank now leads Islamic sustainable finance in the Middle East.
ADIB unveiled its detailed Sustainable Finance Strategy in 2024. This strategy shows the bank’s steadfast dedication to supporting the UAE’s Net Zero objectives. The bank sees sustainable finance as a driving force for environmental resilience, social advancement, and responsible economic development.
“Putting sustainability at the heart of what we do is one of the three key pillars of our 2035 vision,” noted Mohamed Abdelbary, Group Chief Executive Officer at ADIB. “We’re proud of the progress we’re making, and how we’re using our financing to contribute to the transition of our customers and the economy.”
The bank’s initiatives line up with the UAE Bank Federation’s goal to mobilize AED 1 trillion in sustainable finance by 2030. ADIB has also developed its own ESG due diligence toolkit that meets global standards and matches external ratings providers like MSCI and Sustainalytics.
ADIB’s sustainability agenda rests on three core pillars: Operational Decarbonization, Financed Emissions Reduction, and Climate Resilience. These strategic areas help the bank reduce its carbon footprint and equip clients and stakeholders to shift toward green practices.
As a UNEP FI Principles for Responsible Banking signatory, ADIB’s financing activities follow international sustainability standards and Paris Agreement objectives. The bank’s sustainable finance approach follows Sharia principles of ethical conduct and social responsibility, creating a unique blend of Islamic banking and environmental stewardship.
ADIB strengthens its position as a pioneer in responsible Islamic banking through these focused efforts while actively shaping the UAE’s sustainable future.
ADIB sets 2030 emissions targets across six sectors
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ADIB marks a revolutionary milestone as the first commercial Islamic bank in the region that sets complete sector-specific decarbonization targets for 2030. The bank’s initiative maps out exact emission-reduction paths for six sectors that significantly affect its financing portfolio: home finance, auto finance, real estate, air transport, utilities, and petroleum manufacturing.
The bank strategically chose these sectors because they make up about 40% of its UAE financed emissions. These areas now serve as key focal points for meaningful climate action. Their interim 2030 targets match the International Energy Agency (IEA) Net Zero scenarios and boost the UAE’s national decarbonization goals.
ADIB plans to cut its operational emissions by 49% by 2030, with 2022 serving as the baseline year. This bold target shows how seriously the bank takes both operational and financed emissions.
“We recognize the urgent need for the financial industry to play a pivotal role in tackling climate change and we are fully committed to leading the way in sustainable Islamic banking and supporting the UAE’s national goals for a sustainable future,” stated Mohamed Abdelbary, ADIB’s Group Chief Executive Officer.
The bank’s target-setting approach follows international best practices. It uses frameworks from the Partnership for Carbon Accounting Financials (PCAF) to measure financed emissions and the GHG Protocol for operational emissions. The bank also got a full picture through a Double Materiality Assessment based on European Sustainability Reporting Standards (ESRS). This helped them review both financial and societal effects across environmental, social, and governance aspects.
ADIB has already started taking practical steps to reduce its environmental footprint. The bank finished installing its first on-grid solar photovoltaic system in Jafza. This move shows its steadfast dedication to using renewable energy sources. The project specifically targets Scope 2 emissions from facilities and supports the goals set during COP28 for ground, low-carbon solutions.
ADIB issues Green Sukuk and reports environmental impact
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“The lender allocated 90% of the proceeds to fund renewable energy, energy efficiency, and sustainable water projects, cutting around 607,000 tons of estimated emissions reductions (CO₂) annually.” — Abu Dhabi Islamic Bank (ADIB) 2024 Sustainability Report, Official corporate sustainability report
ADIB made history in Islamic finance by issuing the world’s first USD-denominated Green Sukuk in November 2023. The bank raised AED 1835.97 million (USD 500 million) through this trailblazing Sharia-compliant green bond offering. Investors showed exceptional interest as demand grew to 5.2 times the issue size. More than 100 global and regional investors participated, bringing the final order book to AED 9.55 billion.
ADIB Group CEO Nasser Al Awadhi shared his thoughts on this milestone: “We are thrilled to be the first financial institution in the world to issue the first USD-denominated green sukuk, which builds on ADIB’s efforts to address climate change and to advance sustainable solutions that protect the environment and help facilitate a transition to a low-carbon economy.”
The bank released its first Green Sukuk allocation and impact report to show how the funds were used and their environmental benefits. The report revealed that 90% of the money went to renewable energy, energy efficiency, and sustainable water infrastructure projects. These investments proved valuable by helping avoid an estimated 607,000 tons of carbon emissions each year.
AED 1656.05 million found its way to eligible green projects that followed the International Capital Market Association’s (ICMA) Green Bond Principles. This issuance shows how Islamic financial principles can work together with global sustainability goals.
Al Awadhi noted, “This is an important step in our sustainability journey and will further expand the bank’s role in catalyzing capital to address the pressing environmental and social issues facing society today.” The Green Sukuk issuance serves as the life-blood of ADIB’s broader commitment to ethical banking that lines up with climate goals.
The bank’s ESG performance continues to earn recognition. ADIB received an ‘AA’ rating from MSCI, scored 74 from LSEG ESG, and 41 from DJSI. Both Global Finance and MEED named ADIB the Best Islamic Bank for ESG, which strengthens its position as a leader in responsible and sustainable Islamic finance.
ADIB leads the way in sustainable finance by showing how Islamic banking naturally fits with environmental protection. The bank has raised $4.63 billion for green projects, making it a regional leader in sustainable Islamic finance. This puts ADIB well on track to reach its 2030 target of AED 60 billion.
The bank takes a detailed approach that goes beyond just financing. ADIB cut its Scope 1 emissions by 87% compared to 2022, which shows its dedication to protecting the environment. The bank became the first Islamic institution in the region to set specific carbon reduction goals across six key sectors.
The launch of the world’s first USD-denominated Green Sukuk created a model for Islamic banks everywhere. Investors rushed to get involved – demand was 5.2 times higher than the issue size. This proves there’s huge global interest in Sharia-compliant green investments. The project will help avoid 607,000 tons of carbon emissions each year through these financial solutions.
ADIB’s sustainability goals match perfectly with the UAE Bank Federation’s plan to raise AED 1 trillion in sustainable finance by 2030. The bank helps drive the country’s shift toward a low-carbon economy.
Top rating agencies like MSCI, LSEG ESG, and DJSI have recognized ADIB’s leadership. Global Finance and MEED named it the Best Islamic Bank for ESG. These awards show how well ADIB combines Islamic banking with environmental care.
ADIB shows how banks can protect the environment while growing and staying profitable. The bank proves that sustainable finance isn’t just a passing trend – it’s about completely rethinking how banking can build a better future for everyone.
