Abu Dhabi Global Market (ADGM) has implemented its sustainable finance regulatory framework with immediate effect.
This is following “significant support” received through public consultation.
The framework encompasses rules on sustainability-orientated investment funds, managed portfolios and bonds as well as requirements for environmental, social and governance (ESG) disclosures by ADGM companies.
“The measures will accelerate the growth of a sustainable finance ecosystem in the jurisdiction and support the UAE’s transition to net zero greenhouse gas emissions,” the financial centre said.
The framework for green and climate transition funds and portfolios, green and sustainability-linked bonds and sukuks is a significant step in enabling capital to be channelled towards financing the transition to net zero.
In order to recognise products and services that are aiding the transition, ADGM will confer a designation on those that purport to meet its robust minimum standards.
It will also permit ADGM’s “designation mark” to be used in marketing materials and client communications. A designation mark will provide investors with a level of confidence that those products and services purport to meet ADGM’s minimum standards, catalysing investors to channel capital towards the green transition.
Feedback statement
In keeping with ADGM’s focus on stakeholder engagement, a feedback statement has also been issued that reflects on the meaningful feedback received and addresses the key issues raised in response to the consultation paper and through associated stakeholder engagements.
“The overwhelming support for its proposals from industry, including stakeholders who indicated their plans to launch products under the proposed framework, crystallised ADGM’s intention to proceed with one of the first and most comprehensive sustainable finance frameworks in the region”, the ADGM said.
“The feedback statement reflects how industry engagement has not only helped to shape the framework as implemented but also provided a clear indication of the areas that ADGM will examine in a post-implementation review to be undertaken in 2025 as part of its commitment to further develop and refine its regulatory framework going forward.
“ADGM will continue to rely on input from its stakeholders to help shape its ecosystem into a world-class hub for sustainable finance and a significant enabler to further the UAE’s net zero strategic initiative.”
Ahmed Jasim Al Zaabi, chairman of ADGM, said: “In the year that the UAE is hosting COP28, ADGM proudly aligns its actions with those of the country’s leadership who have declared this year as the Year of Sustainability. We believe our regulatory framework for sustainable finance is the most comprehensive in the Middle East and South Asia region, and comparable in scope and content with the most comprehensive regulatory frameworks globally.”
“Our requirements, particularly those which set minimum standards for sustainability-focused products and services, will help to channel capital into projects and activities that advance the country’s transition to net zero. We are grateful to market participants for their feedback, which reflects the excellent relationship between ADGM and its stakeholders within our sustainable finance ecosystem.
“Their engagement will continue to be essential as ADGM actively supports the UAE’s progress towards its goal of net zero by 2050 and the continuing development of Abu Dhabi’s green falcon economy.”
