October 8, 2025 • 39 mins
Green bonds may have transformed the world by volume, but blue bonds are poised to change it by depth. In this episode of ESG Currents, BI EMEA ESG Integration Analyst Grace Osborne speaks with Shargiil Bashir, chief sustainability officer and executive Vice president at First Abu Dhabi Bank, discuss how blue bonds are mobilizing capital toward protection of critical marine ecosystems. They explore how the UAE is moving from ambition to action, leveraging blended finance and innovating to meet climate and water goals in one of the world’s driest regions.
This episode was recorded on Sept. 16.
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Episode Transcript
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Speaker 1 (00:09):
ESG is constantly evolving.
Speaker 2 (00:11):
Over the years, it has shifted from socially responsible investing
to impact to sustainable finance. While the terminology continues to change,
what hasn't changed are the underlying science, market pressures, and
tangible physical and financial impacts of the climate crisis, increasing
regulatory scrutiny, and rising consumer expectations.
Speaker 1 (00:29):
We aim to filter out the noise.
Speaker 2 (00:31):
By speaking with industry experts to identify what is really
driving value. Welcome to ESG Currents, brought to you by
Bluemeg Intelligence. I am Grace Osborne, the mere ESG integration
analyst and your host for today's episode. Today we are
joined by Chargil Bashir, chief Sustainability Officer and Executive Vice
President at First Abdab Bank. Shargil has been a driving
(00:53):
force in advancing sustainable finance across the Middle East and globally.
Speaker 1 (00:57):
Under his leadership, First A. W.
Speaker 2 (00:59):
Debbie Bank has become the first bank in the GCC
to commit to net zero and is pioneering innvtive mechanisms
such as blue bonds and nature finance, mobilizing private capital
to restore ecosystems, biodiversity and sustainable water management. The UN
values the ocean economy at more than three trillion dollars
a year, with blue bond market projector to reach seventy
(01:20):
billion dollars by twenty thirty, these instruments are emerging as
a cornerstone or sustainable investment. Beyond his role at First
Abidabi Bank, Shargill says on UNET Financial Banking Board and
is the author from Vision to Impact. He's playing a
critical role in shaping the future of sustainable finance and
is a privilege to have him joined us for today's discussion.
Speaker 1 (01:41):
Thank you so much for joining us.
Speaker 3 (01:42):
Thank you so much for having me Grace.
Speaker 2 (01:44):
So perhaps to start with the UAE, of course has
set some pretty ambitious sustainability goals, including the Water Security
Strategy of twenty thirty six. Last year it updated its
NDC strengthening its emissions commitments. But I'm interested to hear
what attracted you to the region to drive forward sustainable
finance leadership and how is finance really shaping up to
(02:07):
deliver on these commitments.
Speaker 3 (02:08):
So great, What attracted me to the UEE was the
ambitions and ability to lead globally. So just as you mentioned,
ue have set some very ambitions goals when it comes
to water security strategy, but also enhancing its NDCAS. We
saw UAE hosting a COP twenty eight which was a
(02:29):
milestone COP as well. I think that just underlines UE's
ability to be leading globally when it comes to the
topic on climate, on the topic of innovation, but also
how to do a transition in a pragmatic, pragmatic way.
(02:51):
So that's what has attracted me to this region, and
especially when it comes to the financial industry, it plays
a key role in supporting on that transition. And when
we look at the UE and the wider region, what
we're seeing is that you know, you are building the
infrastructure to deliver on these goals and and this is
(03:13):
happening from the policy making side, as an example the
recent climate change law to the growth in the in
the green capital market as well. So it's not just
about promises or ambitions, it's actually about taking action and delivering.
And I think that that is something that has really
motivated motivated me and which I really appreciate about the UE.
Speaker 2 (03:37):
Yeah, I think it's amazing and actually the current kind
of global environment that we're in, the energy that you
feel when you go there, and the momentum surrounding sustainable
finance is actually really.
Speaker 1 (03:46):
Quite powerful out there.
Speaker 2 (03:48):
It does feel that the infrastructure is being built out
to deliver on the goals and as you mentioned, move
from ambition through to action. And of course First tib
Adabi Bank has already been at the forefront of sustainable
finance with in the UA and driving innovation in the space.
I think you mentioned it was the first bank in
GCC to commit to ASERA twenty fifty and it's really
(04:08):
been pioneering new products, including just recently having issued the
three hundred and ninety million Hong Kong dollar Blue bond.
And I'd really love to hear a bit more about
the blue bond, what makes it different traditional green bond
and how is it going to support critical marine ecosystems.
Speaker 3 (04:25):
So great the issues of the three hundred and ninety
million Hong Kong dollar Blue Bond is actually a key
milestone for FAB. Back in twenty seventeen, we were the
first financial institution in the region to issue a green bond,
and of course we're very proud that now in twenty
twenty five to be the first bank in the region
(04:47):
to issue the first blue bond by a financial institution.
So this is an important milestone for us because it's
underlying the importance for us that how we can mobilize
capital for the importance of the environment and try to
do it in an innovative way as well, which I
(05:09):
think is very important. What sets aside the blue bond
from the traditional green bonds is basically its specific focus
around water related environmental objectives. So when we look at
the green bonds, they broadly support the climate environmental projects, right,
so this can be everything from renewable energy to wider
(05:32):
sustainability and green related projects. When we go specifically to
blue bonds, these are designed specifically to mobilize capital towards
protection of the marine ecosystem. This can be sustainable water
management areas that have been historically underfunded despite its significant
(05:53):
importance globally. So and this bond specifically aligns with our
Sustainable Finance framework that published in twenty twenty four and
the igma's Green Borne Principles as well, and was actually
seen a lot of interest from Article nine investors who
were looking into blue labeled instruments specifically. And the proceeds
(06:17):
from this project will be supporting, you know, within the
FABS asset pool that will be focusing on sustainable water
infrastructure for clean drinking water. It will be focusing on
climate adaptation initiatives such as conservation and rehabilation of wetlands,
man grooves, coral reefs. So those are the projects that
(06:41):
this band specifically will be focusing around. And again more importantly,
it's an issuance that also supports ueeas Water Agenda of
twenty thirty six, which aligns with the country's broader ambition
around around the topic of sustainability, but also underline some
(07:02):
of the key bands that will be taking place in
the UE, with the IUC and Congress being held in
Abu Dhabi in October, but also the U and Water
Conference in twenty twenty six December being held in the
UE as well. So we believe that this is an
important milestone that can hopefully support on raising the awareness
(07:25):
and the focus about blue financing and the need for
projects like this one on bluebonds.
Speaker 2 (07:33):
Yeah, it's fascinating. We've actually obviously had a lot of
focus on terrestrial kind of conservation, but of course the
ocean is one of the largest carbon sinks in the world.
Speaker 1 (07:42):
It services are very.
Speaker 2 (07:43):
Important to the global economy, and as you mentioned, things
like mangroves are actually key in adaptation and resilience as
well as acting as an important carbon sync yeat marine
ecosystems have typically been underfunded, so this really highlights the
importance of blue bonds and mobilizing capital tools these marine ecosystems.
Speaker 1 (08:01):
And I was going to ask you.
Speaker 2 (08:03):
Why now, but I think apart from the critical importance
of water as a resource, it's clearly important to the
EUEES water strategy. We have the upcoming UN Water Conference
next year and the IUCN World Conservation Congress just this month,
so of course also really important with the growing realization
(08:24):
of the risks around things like water scarcy. But we
are seeing momentum in the space, and it's interesting that
you mentioned that bluebonds are seeing a lot of interests
from Article nine investors, and we've seen global guidelines from
IKMA as you mentioned, begin to develop. And I think
asset managers like hero Price and Fidelity they've recently launched
(08:47):
their dedicated bluebond funds just last year. So what do
you think is going to further formalize this as an
asset class and kind of enable it to scale further
going forward, given its clear importance.
Speaker 3 (08:59):
I fully agree with your points, and I think especially
when we look at the Meaner Region, right, I think
sometime it's important to just take a step back and
have a look at it. If you look at the
Meaner Region is actually one of the most water stressed
regions globally. Right, Fourteen of the seventeen most stressed countries
(09:20):
are coming from this region. And if you just look
at the comparable the region covers around ten percent of
the world's land area but holds only one percent of
its fresh water resources. But there is a clear burning platform,
so to say, to really focus on the topic of water.
And we continue to see a growing water demand and
(09:43):
supply gap happening, right because we need more and more water. However,
the supply has probably just going downwards as well. So
how is it that you manage this part which is
a topic that is significantly important for a big part
of the world and especially to the region as well.
(10:03):
When we look at to the investor interest specifically, I
think what is really important to know and you highlight
it again. We've seen Goldman Sachs biodiversity bonds, We've seen
other good initiatives We've also seen the guidelines coming from
IGMA on sustainable bonds from Nature as well. We've seen
bluebond guidance coming from unf FI, IFC and so on. However,
(10:28):
to scale the blue finance in a meaningful way, we
need more than the guidelines, right. So the guidelines have
been a very very important first step to say that.
You know, we have for many years now been discussing
green bonds specifically, and now having the guidelines that sets
and specifies blue bond are important. They are. This is
(10:51):
a good foundation. However, we need to do much more. Right.
We need to create a market infrastructure. We need to
discuss standardize impact matrixes so the investors get a better
idea of what is the impact coming from the blue
economy and the blue bond. We need to discuss de
risking mechanism and so we can attract private capital. We
(11:14):
need to discuss Blended finance is going to be very
important from this perspective because when we are discussing a
topic like water, sustainable water management, it is critical. It's
a role where the governments and public sector plays a
critical role, and that's why we need the blended finance discussions.
(11:35):
We need to have more partnership discussions between the public
and private sector. We need to make sure that we
get the policy integration done where the blue finance gets
embedded in the national development plans and budgets and discussions, right,
because we cannot discuss blue projects or blue financing in
(11:57):
the isolation of the national development plans and agenda. These
things need to go hand in hand because these are
some critical resources that we need in the future, and
that's why it's important that we can align these topics.
So I think that's what we need more and then
I think that you're going to see the investor demand
following from that perspective as well. Yeah.
Speaker 2 (12:19):
Absolutely, And I think of course everything gets back to
financial materiality, and it's pretty clear water underpins the economy
and actually it's just generally essential to human life. And
as you mentioned that statistic that fourteen of the seventeen
most stress countries are coming from the Mena region, and
this region covers around ten percent of the world's land
(12:40):
area that holds only one percent of its freshwater resources.
So it really is critical to be bringing together different
stakeholders to finance such a critical resource.
Speaker 1 (12:51):
And we are.
Speaker 2 (12:51):
Increasingly seeing water scattery risks having to be integrated into
financial decisions. I think one area where we're seeing a
lot of development is around data centers and the very
water intensive nature of their operations and financiers and investors
actually having to look at these assets and map out
what the kind of future wall scarce risks are and
(13:12):
having to include that in any credit lines that they're issuing,
and also look at the opportunities that they're financing as
well within the marine space. And I think you definitely
touched on this already, but nature is notoriously more challenging
to finance than carbon. Everyone i think can get their
heads around the concepts of one ton of carbon, but
it's harder to get that kind of one metric for nature,
(13:33):
and that is a significant challenge for investors when they're
quantifying the risk and opportunities around nature. I think first
Abidabi Bank have recently published the first TNFD aligned reports
of course, embedding nature like water, use, waste, biodiversity into
the assessments, and I'm curious what kind of key challenges
(13:54):
and maybe more importantly, what the key findings that saw
the need for action despite those lunches within nature, Resking opportunities.
Speaker 3 (14:03):
So you're absolutely right, Grace. The nature related risks are
much more complex and then less standardized than carbon right,
which makes them much harder to quantify and also finance.
And this is exactly the reason that we started working
on the topic of nature one and a half years ago,
(14:24):
to start understanding that how do we build our internal
understanding and capabilities on the topic of nature, How do
we understand the market we're operating in, so what is
the priorities of the UEE and the region when it
comes to nature, and how can we start this work?
And this is the work we started and started to
(14:45):
look towards the TENFT framework to say, let's start by
the TENFT framework, let's start following that framework, understand our
own strategy, understand the governmance we need to set up.
From this perspective, let's start looking into the risks we
have in our portfolios so on, and that eventually concluded
into us publishing our first team FG report that was
(15:06):
published in Generary. But this was actually an exercise that
started much longer ago for us, basically building our own capabilities,
and this assessment gave us actually some critical findings. As
an example, the water consumption and waste generation. How that
is emerging as an with this abrosi operational impact into
(15:29):
these sectors we finance. Right, it's also about the sectorial
dependencies when it comes to biodiversity and the ecosystem services.
It's also about the need to embed nature into our
financial products but also our policies and our assessments when
(15:50):
we're doing those right. So we have been very focused
on doing esg assessments of our clients, typically focusing on
the topic of climate, but not really bringing in nature.
And also the complexity with nature is also that nature
is multiple things. Nature is water, it's forest, it is
(16:10):
a biodiversity and so on and so on. So there's
many layers on the topic of nature, so it requires
a lot of understanding. But also the challenges with data
are huge. Right. So just once we are discussing the
challenges on data on climate, well is said ten times
(16:33):
worse if not more, discussing nature because a lot of
our clients, portfolios and governments, etc. Don't have this data,
or don't publish this data, or do not understand the
way to use this data as well. Right, because sometimes
we first of all, we were surprised about how much
(16:55):
data we did not have and once we then started
working on to say that, you know, what are the
kind of insights we can find based on this, right, So,
how can we start using due location data to better
understand the exposure we are having towards some of the
challenged industries and sectors which are dependent on the topic
(17:19):
of nature and biodversity. This can be like agriculture, real estate,
and tourism. So you just need to start breaking it
down step by step, which takes some time, and take
some time to understand these sestors as well in detail
and then start working on them. But it's also important
to understand that it is critical to work with them
(17:42):
right because when we look at the facts that are
around us, more than fifty percent of the global GDP
is moderately or highly dependent on nature, right and when
we look into the nature, climate solutions could help deliver
thirty percent reduction in emissions by twenty thirty. So there
(18:06):
are some clear opportunities and risks we need to focus
on when we discuss the topic of nature. And that's
where that TNFD framework is a really good starting point
that it helps you understand where do you stand from
a nature perspective and how do you start defining a strategy,
(18:27):
a governance, understanding your risk, start looking into the opportunities
that you can work with. And I think that was
really really important for us in our journey to enhance
our focus on nature.
Speaker 2 (18:39):
Yeah, I think it's so interesting to kind of hear
about the process. I speak to a lot of whether
it's banks or investors, they kind of jump to the
end stuff and they're saying, well, our clients they report
the data and therefore it's too challenging. But actually just
to hear taking the step back, kind of taking that
step by step and how important it is just to
be able to get that insight into what are risk exposures. Also,
(19:02):
I guess increasingly where do the opportunities lie? And I
think even some of the stature gave around the water
supply and demand mismatch or how critical this work really
is and why it's so important to be embedding these
kind of risks and around nature into both kind of investments,
credit lines when doing kind of financial analysis, and why
(19:25):
it's financially fundamentally financially material. I know you alluded to
this earlier, but how important the kind of role of
blended finances in the water space, the nature space of
course that as one but I think we've seen mixed
results around blended finance globally.
Speaker 1 (19:45):
But actually we've seen some.
Speaker 2 (19:47):
Pretty effective examples within THEE perhaps compared to some other regions.
It'd be really great to maybe hear some examples of
where it's worked effectively and what lessonsly other markets could
take away from these experiences.
Speaker 3 (20:06):
I think you're absolutely right when I when I look
into a lot of other markets and see how blended
finance has developed, I think UEE has a unique track
record on bringing the public ambition and the financial strength
and the institutional coordination that that helps them really mobilize
(20:30):
the capital that is needed. Right. So, we saw during
the COP twenty eight that the UA banking sector made
a commitment to mobilize one trillion dirhams to sustainable finance
by twenty thirty. And this was a clear signal by
the banking industry stand alone that you know, we are
here to support and it's a national priority to support this.
(20:53):
And then the industry have gone and work with the
public sector to say that how can we mobilize this
capital to support on the important transition that UAE is
going through with its ambition of achieving that zero by
twenty fifty. And I think what we are also seeing
is the UAE's ability to liaise with all the stakeholders
(21:15):
and established structured risk sharing as well. Right. I think
when I saw some latest data was that in the
Mena region we have seen eighty three blended finance transactions
which totals fourteen billion US dollars, right, with Ue emerging
one of the leaders in some of these vehicles and
(21:37):
a lot of these sectors that have been focused has
been around infrastructure, it is energy, it is financial services
that is coming to this and I think when we
look at it, the Ue government has pledged one hundred
and twenty five billion US dollars towards the net zero
goals it needs to achieve. However, the total investment that
is needed is well above five hundred billion, right, And
(22:01):
that's why the blended finance helps bridge the gap. And
I think one of the reason is that, you know,
you have a leadership that is bringing together the policy makers,
the private sector, the public sector to say here is
a challenge, here is a gap we need to close.
How can we do this? And we've seen enormous examples
(22:23):
of this. When we look back to COP twenty eight,
we saw the public sector, we saw the private sector
coming together. We saw how during COP twenty eight, just
in the first week, we saw significant commitments and mobilization
of finance to really act on these things. So I
think that the model UAE have seen, which we are
(22:44):
also starting to see in other markets, is really putting
the policy makers, public sector, private sector together and say
we have an ambition, how can we work from that perspective.
I think a good example is the work on the NDCs, right,
So when you updated its NBC, it's it was more
ambitious than it was before. However it's still brought together
(23:08):
the private sector to say that these and these industries
will be impacted. How do we address this challenge together? Right?
And I think that's very important that you bring that
private public sector partnership to achieve this. It's not just
policy makers making policies. It's basically a model where you
(23:29):
bring the governments, you bring the DFIs, you bring the
commercial banks to work together to say that how can
we unlock a capital at scale for climate and nature
positive solutions and outcomes? And I think that that seems
to be a recipe that has worked really really well
in the UAE and in the Vibry region as well.
Speaker 2 (23:51):
I think it's so interesting because a lot of these
topics actually need such an array of expertise and these
the financial expertise and the scientific expertise use and nature
is particularly challenging as a topic. Getting into the finding
details and bring it all together is absolutely key for
driving progress. And of course we talk about the momentum
(24:11):
around climate and around nature when we're talking about resources
like water where it's of fundamental public interest as well
as the kind of commodity that we really need to
bring together these multiple stakeholders to drive progress and ensure
that we're conserving it as a resource.
Speaker 1 (24:29):
So nature and climate are very much intertwined. And I
think you.
Speaker 2 (24:33):
Talked about some of the use of proceeds for the
blue bonds looking at things like mangroves, and of course
mangro is actually critical in terms of adaptation finance as
well as climate finance, and we're seeing a lot of
growing momentum in this area where nature can play a
role in both resilience and adaptation. I think you mentioned
(24:53):
that nature can actually help us move towards our carbon
goals and help deliver thirty percent reduction in emissions twenty thirty.
So there's a lot of opportunity in the nature space.
In fact, I think it was an Abi Dabi where
they had one hundred million.
Speaker 1 (25:07):
Dollar Mangrove project.
Speaker 2 (25:08):
And I'm just curious about your take on the interaction
between climate and nature adaptation and where this kind of
finance is being mobilized to both those aspects as well.
Speaker 3 (25:21):
I think you're absolutely right, Grace. If you look at
nature based solutions like Mangrove, they basically have a dual
purpose assets, right. So one side they mitigate, right because
the climate change by sequestering the carbon, but also adapt
by protecting coastlines from storm surges, is flooding and so
(25:45):
on as well. So I think that the key is
basically that how can we mainstream nature into the financial
decision making right and where the blue bonds are proving
to be a strong just to do that. But we
also are starting to see a growing investor interest and
(26:07):
we're starting to see guidance as we discussed before now
coming into place. We're entering into a new phase where
adaptation finance and can be scaled through innovative instruments that
can get rooted into nature. Right, because if we go
back five years ago, where bluebonds wasn't really under discussion,
(26:29):
what we saw was a lot of green financing just
happening under the green bonds. And now since the topic
of climate and green has increased significantly, rightly, so we
need to make sure that the focus on nature is
also intact, right And that's why having an innovation in
(26:51):
the blue bonds specifically can help you achieve this. And
I think that's gonna be that's gonna be important, right,
And I think that's where the financial industry can play
a role. We can't do it by ourselves, right. The
financial industry need the support from the policy makers, It
needs the support from the public sector, it needs the
(27:11):
support from the rest of the private sector, It needs
the investor interest to continue growing from that perspective as well.
And I think once we get to that point that
all these different forces are aligning, I think we will
see a significant growth into the blue financing aspect as well.
Speaker 2 (27:31):
Yeah, And I think what's interesting is perhaps maybe at
this point in time in the region actually sustainability, nache finance,
climate finance is much more seen as an opportunity I
think rather obviously it's around the rest the very real risks,
but it feels like a more optimistic outlook and the
(27:52):
financial opportunity sets rather than just looking at it as
a problem, which I think helps kind of drive that
momentum memorizing how important these.
Speaker 1 (28:01):
Different aspects are.
Speaker 2 (28:04):
Leue is definitely positioning itself as a global hub for
sustainable finance. Curious what opportunities do you see for the
Gulf to become I say, become a leader in blue
and nature finance globally, but actually very much leading the way.
And I guess we have touched on this, but what
evolving products are you excited about? I think it's so
(28:27):
exciting to see the innovation in this in this space.
Speaker 3 (28:30):
Yeah, I think first of all, I think UEE has
proven itself over years to be a leader on the
topic of transition, on the topic of climate and now
also as we mentioned with iucn U and what a
conference coming to the ue as well over the next
(28:51):
twelve to eighteen months is a significant underlining of the
role UEES lay in the global topic of sustainability and
the and the transition towards a nature positive future, but
also a low carbon future as well. So I think
(29:12):
UE is uniquely positioned, and also, as we discussed before,
because UA has found this recipe of bringing the different
stakeholders together, right, I think I think UA has proven
again and again on the biggest stage like the COP
twenty eight, but also through these you know eighty plus
transaction we discussed previously, which are of course in the
wider region. I think the region has shown that, you know,
(29:35):
how can you bring all these different stakeholders together and
really start mobilizing capital and at a scale. When we
look at it from an FIB perspective, we see this
more than just a regional opportunity, right, We believe this
is a global opportunity to work on this. Right when
we look at the marine ecosystem, especially when it comes
(29:59):
to the blue carbon habitats like the mandrews, the seagrass meadows,
it's not just only the biodiversity hotspots but also powerful
carbon synks, right, So they play multiple roles here and
that's why we are very proud, you know, to have
been the first bank in the region to issue this
(30:20):
blue bond, and which is aligned with the global guidelines
and the best practices, and we want to continue seeing more.
We hope that many more banks follow follow this direction
as well, right, and this can happen in the region,
it can definitely also happen globally, so we hope that
many moors will will follow through. But also what's really
(30:41):
exciting for me is that, you know, we have now
started this journey with the topic of nature becoming more
and more important. When you look at the COPS sixteen
last time that took place in Colombia, I believe it
had the record high attendance, right, and we are seeing
the topic of nature getting more and more tension, more
and more focused, which is really needed, which will hopefully
(31:04):
also help with more financial innovation as well. For us.
Bluebond was the first step. Hopefully we will see much
more innovation coming from that perspective. This could be nature
link bonds as an example. You know, I believe that
hopefully we will soon also start seeing blue suit coops
coming through. We have already started to see as some
(31:26):
initial depth for nature swaps. We have started to see
nature asset companies or payments for ecosystem services. So we
have started to see different innovations coming through and hopefully
over the coming years we will really start seeing them
scale up. The ideal situation will of course be that
(31:47):
you know, we can get the blue bonds to the
level we are now with the green bonds. How it
is probably going to take a lot of time, but
I think that the UAE has shown by taking some
really really bold steps in this direction, and we as
FAB is proud that we can support on on on
this journey. And and it's important for us to you know,
continue supporting our clients in their transition, whether this is
(32:11):
related to climate, whether this is related to nature. We
do know that a lot of our clients and our
portfolios are impacted by by nature as well, and and
plays a really really important topic and team, so it's
important for us to liaise with them as well to
say that, you know, how can we best support them
into into this transition and and support them with understanding
(32:36):
their impact on nature and collaborate on that topic.
Speaker 2 (32:40):
Yeah, I think it's it's so interesting that nature essentially
does have multiple returns on investment, has the carbon zinc.
It has obviously positive implications for bid de US team
regulating our ecosystems. So it's a really exciting area for
seeing kind of what innovation and we have seen that
here a lot in the last kind of a few years,
and that momentum building. I think even you hear people
(33:04):
maybe who don't sit in the space of sustain of finance, ESG,
but things are impact in their companies so without even realizing,
they are engaged in the nature space. And I think
we've got an exciting few months coming up in the
space we've got as you mentioned that, I see n
World Conservation Congress and ABI ABI. Of course we've got
COP thirty in Brazil and November, and next year it's
(33:27):
the UN Water Conference. So there's a lot of momentum
going on. I think we have really touched on this.
But what are you kind of hoping for here? What
outcome is obviously it touched on a massive amount of topics,
but what should the golf regent really be pushing for.
Speaker 3 (33:45):
I think I do hope that you know, we start
seeing a unified push for nature positive binets, right because
at this point we are still seeing a few use
cases examples popping up here there. You've seen the blue
bond issuance from from fab Now we have seen some
(34:06):
similar issuances from some other banks globally, but ideally we
need to be in a place that you know, these
issuances are these transactions should not be unique, right. We
need this big push to to basically make blue financing mainstream, right,
So I think I think that that's going to be
really important. I also hope, which is really important for me,
(34:28):
is that you know, we need to start seeing integration
of nature into the NDCs as well, right, because NDCs
have been very focused about climate, and we do know
and we have seen this historically that once you really
get things into your NDCs, we start seeing the policy
makers moving into that direction. We start seeing the public sector,
(34:50):
the private sector moving and that's where we really start
seeing the needle moving, right when you get all these
parties in and I think, what you really need to
move of a topic of na we really need nature
to be embedded into the government plans. Right. I think
that's going to be really really important. So that's something
I hope. Then, of course, I think we always speak
(35:12):
about this global standards. It's going to be important, and
you know, on the topic of climate, we've now got
iss B as well. Finally, but I also think that
you know, we need to figure out what's going to
be the global standards for nature disclosures, right, so we
need to think about that. You know, how can nature
disclosures get embedded into maybe iss B, You know, how
(35:37):
can we work from that perspective so it becomes much
more clear, but also easier and simpler for organizations to
work with this, right because when we want some pragmatic
solutions that are not complicated for companies and etc. To
work with, right, because we don't want to be in
a situation that you have more people doing your reports
(35:59):
and compliance less people who are actually trying to make
a difference for the blue finance and the blue economy.
So I think that that's going to be an important
balance to manage. But I think I think those are
some of the topics that I really hope that we
can see over the coming time really emerge into something
(36:20):
that can help us create a difference.
Speaker 2 (36:21):
Yeah, I think is very interesting times ahead. And I
think it is very interesting in nature that it's often
thought as very geo location specific to certain assets and
things like that, but actually in the greater system of
regulating climate globally, it's key to kind of get that
global framework and people on board aligned going forward, I
(36:44):
think perhaps a more fun question to end on. But
of course we've seen green bonds scale and well blue bonds,
they are very specific in the outcome. Which do you
views having greater propensity to change the world.
Speaker 3 (37:04):
That's that's that's a good question, not an easy one
to answer.
Speaker 2 (37:09):
I think.
Speaker 3 (37:09):
I think for me, green bonds change the world by
the volume, right, because they have the skill. But I
think the the blue bond changed the world by its depth, right.
And I think I think, you know, when we need
to put them together, we will see a much more
sustainable future. But but we do need I think blue
(37:34):
bonds and blue finance have a specific place that is
going to be very very important in the years to come.
That can really help us make that change. And and
I don't think that the green bonds can do it
by themselves. I think that, you know, blue bonds will
play a key role. However, I do expect that the
(37:55):
green bonds will continue to have the largest volume and
because they create that change through the volume, but I
think that the details and the focused change that is
required will come through the blue bonds.
Speaker 1 (38:14):
I think that's a very good answer. We need both.
Speaker 2 (38:18):
I think it's really exciting to see and hopefully blue
bonds can really scale. We'll begin to see them become
more mainstream and nature being integrated into NDCs and seeing
more kind of global standards for nature. I think they
really do have a propensity to have a massive impact
and actually greater awareness of the implications and the impact
(38:40):
of driving finance into blue spaces. I mean that blue
bonds are going to be really critical going forward. It
has been absolutely fantastic to hear from you and the
work around blue bonds and nature finance and the real
kind of pioneering and to work that first Abi Dabbi
Bank is doing and of course the EAE is doing
to build up that infrastructure to allow sustainable finance to
(39:01):
scale and more specifically nature financed to scale. So thank
you so much for joining us.
Speaker 3 (39:08):
Thank you so much for having me, Gracefly appreciate it.
Speaker 2 (39:10):
You can find more information on sustainable finance by going
to ESG and Sustainable Debt on the Bloomberg terminal.
Speaker 1 (39:17):
If you have an.
Speaker 2 (39:18):
ESG quandary or burning questions you would like to ask
BI expert on this, send us an email at ESG
Currents at bloomberg dot net.
Speaker 1 (39:26):
Thank you,
ESG is constantly evolving.
Speaker 2 (00:11):
Over the years, it has shifted from socially responsible investing
to impact to sustainable finance. While the terminology continues to change,
what hasn't changed are the underlying science, market pressures, and
tangible physical and financial impacts of the climate crisis, increasing
regulatory scrutiny, and rising consumer expectations.
Speaker 1 (00:29):
We aim to filter out the noise.
Speaker 2 (00:31):
By speaking with industry experts to identify what is really
driving value. Welcome to ESG Currents, brought to you by
Bluemeg Intelligence. I am Grace Osborne, the mere ESG integration
analyst and your host for today's episode. Today we are
joined by Chargil Bashir, chief Sustainability Officer and Executive Vice
President at First Abdab Bank. Shargil has been a driving
(00:53):
force in advancing sustainable finance across the Middle East and globally.
Speaker 1 (00:57):
Under his leadership, First A. W.
Speaker 2 (00:59):
Debbie Bank has become the first bank in the GCC
to commit to net zero and is pioneering innvtive mechanisms
such as blue bonds and nature finance, mobilizing private capital
to restore ecosystems, biodiversity and sustainable water management. The UN
values the ocean economy at more than three trillion dollars
a year, with blue bond market projector to reach seventy
(01:20):
billion dollars by twenty thirty, these instruments are emerging as
a cornerstone or sustainable investment. Beyond his role at First
Abidabi Bank, Shargill says on UNET Financial Banking Board and
is the author from Vision to Impact. He's playing a
critical role in shaping the future of sustainable finance and
is a privilege to have him joined us for today's discussion.
Speaker 1 (01:41):
Thank you so much for joining us.
Speaker 3 (01:42):
Thank you so much for having me Grace.
Speaker 2 (01:44):
So perhaps to start with the UAE, of course has
set some pretty ambitious sustainability goals, including the Water Security
Strategy of twenty thirty six. Last year it updated its
NDC strengthening its emissions commitments. But I'm interested to hear
what attracted you to the region to drive forward sustainable
finance leadership and how is finance really shaping up to
(02:07):
deliver on these commitments.
Speaker 3 (02:08):
So great, What attracted me to the UEE was the
ambitions and ability to lead globally. So just as you mentioned,
ue have set some very ambitions goals when it comes
to water security strategy, but also enhancing its NDCAS. We
saw UAE hosting a COP twenty eight which was a
(02:29):
milestone COP as well. I think that just underlines UE's
ability to be leading globally when it comes to the
topic on climate, on the topic of innovation, but also
how to do a transition in a pragmatic, pragmatic way.
(02:51):
So that's what has attracted me to this region, and
especially when it comes to the financial industry, it plays
a key role in supporting on that transition. And when
we look at the UE and the wider region, what
we're seeing is that you know, you are building the
infrastructure to deliver on these goals and and this is
(03:13):
happening from the policy making side, as an example the
recent climate change law to the growth in the in
the green capital market as well. So it's not just
about promises or ambitions, it's actually about taking action and delivering.
And I think that that is something that has really
motivated motivated me and which I really appreciate about the UE.
Speaker 2 (03:37):
Yeah, I think it's amazing and actually the current kind
of global environment that we're in, the energy that you
feel when you go there, and the momentum surrounding sustainable
finance is actually really.
Speaker 1 (03:46):
Quite powerful out there.
Speaker 2 (03:48):
It does feel that the infrastructure is being built out
to deliver on the goals and as you mentioned, move
from ambition through to action. And of course First tib
Adabi Bank has already been at the forefront of sustainable
finance with in the UA and driving innovation in the space.
I think you mentioned it was the first bank in
GCC to commit to ASERA twenty fifty and it's really
(04:08):
been pioneering new products, including just recently having issued the
three hundred and ninety million Hong Kong dollar Blue bond.
And I'd really love to hear a bit more about
the blue bond, what makes it different traditional green bond
and how is it going to support critical marine ecosystems.
Speaker 3 (04:25):
So great the issues of the three hundred and ninety
million Hong Kong dollar Blue Bond is actually a key
milestone for FAB. Back in twenty seventeen, we were the
first financial institution in the region to issue a green bond,
and of course we're very proud that now in twenty
twenty five to be the first bank in the region
(04:47):
to issue the first blue bond by a financial institution.
So this is an important milestone for us because it's
underlying the importance for us that how we can mobilize
capital for the importance of the environment and try to
do it in an innovative way as well, which I
(05:09):
think is very important. What sets aside the blue bond
from the traditional green bonds is basically its specific focus
around water related environmental objectives. So when we look at
the green bonds, they broadly support the climate environmental projects, right,
so this can be everything from renewable energy to wider
(05:32):
sustainability and green related projects. When we go specifically to
blue bonds, these are designed specifically to mobilize capital towards
protection of the marine ecosystem. This can be sustainable water
management areas that have been historically underfunded despite its significant
(05:53):
importance globally. So and this bond specifically aligns with our
Sustainable Finance framework that published in twenty twenty four and
the igma's Green Borne Principles as well, and was actually
seen a lot of interest from Article nine investors who
were looking into blue labeled instruments specifically. And the proceeds
(06:17):
from this project will be supporting, you know, within the
FABS asset pool that will be focusing on sustainable water
infrastructure for clean drinking water. It will be focusing on
climate adaptation initiatives such as conservation and rehabilation of wetlands,
man grooves, coral reefs. So those are the projects that
(06:41):
this band specifically will be focusing around. And again more importantly,
it's an issuance that also supports ueeas Water Agenda of
twenty thirty six, which aligns with the country's broader ambition
around around the topic of sustainability, but also underline some
(07:02):
of the key bands that will be taking place in
the UE, with the IUC and Congress being held in
Abu Dhabi in October, but also the U and Water
Conference in twenty twenty six December being held in the
UE as well. So we believe that this is an
important milestone that can hopefully support on raising the awareness
(07:25):
and the focus about blue financing and the need for
projects like this one on bluebonds.
Speaker 2 (07:33):
Yeah, it's fascinating. We've actually obviously had a lot of
focus on terrestrial kind of conservation, but of course the
ocean is one of the largest carbon sinks in the world.
Speaker 1 (07:42):
It services are very.
Speaker 2 (07:43):
Important to the global economy, and as you mentioned, things
like mangroves are actually key in adaptation and resilience as
well as acting as an important carbon sync yeat marine
ecosystems have typically been underfunded, so this really highlights the
importance of blue bonds and mobilizing capital tools these marine ecosystems.
Speaker 1 (08:01):
And I was going to ask you.
Speaker 2 (08:03):
Why now, but I think apart from the critical importance
of water as a resource, it's clearly important to the
EUEES water strategy. We have the upcoming UN Water Conference
next year and the IUCN World Conservation Congress just this month,
so of course also really important with the growing realization
(08:24):
of the risks around things like water scarcy. But we
are seeing momentum in the space, and it's interesting that
you mentioned that bluebonds are seeing a lot of interests
from Article nine investors, and we've seen global guidelines from
IKMA as you mentioned, begin to develop. And I think
asset managers like hero Price and Fidelity they've recently launched
(08:47):
their dedicated bluebond funds just last year. So what do
you think is going to further formalize this as an
asset class and kind of enable it to scale further
going forward, given its clear importance.
Speaker 3 (08:59):
I fully agree with your points, and I think especially
when we look at the Meaner Region, right, I think
sometime it's important to just take a step back and
have a look at it. If you look at the
Meaner Region is actually one of the most water stressed
regions globally. Right, Fourteen of the seventeen most stressed countries
(09:20):
are coming from this region. And if you just look
at the comparable the region covers around ten percent of
the world's land area but holds only one percent of
its fresh water resources. But there is a clear burning platform,
so to say, to really focus on the topic of water.
And we continue to see a growing water demand and
(09:43):
supply gap happening, right because we need more and more water. However,
the supply has probably just going downwards as well. So
how is it that you manage this part which is
a topic that is significantly important for a big part
of the world and especially to the region as well.
(10:03):
When we look at to the investor interest specifically, I
think what is really important to know and you highlight
it again. We've seen Goldman Sachs biodiversity bonds, We've seen
other good initiatives We've also seen the guidelines coming from
IGMA on sustainable bonds from Nature as well. We've seen
bluebond guidance coming from unf FI, IFC and so on. However,
(10:28):
to scale the blue finance in a meaningful way, we
need more than the guidelines, right. So the guidelines have
been a very very important first step to say that.
You know, we have for many years now been discussing
green bonds specifically, and now having the guidelines that sets
and specifies blue bond are important. They are. This is
(10:51):
a good foundation. However, we need to do much more. Right.
We need to create a market infrastructure. We need to
discuss standardize impact matrixes so the investors get a better
idea of what is the impact coming from the blue
economy and the blue bond. We need to discuss de
risking mechanism and so we can attract private capital. We
(11:14):
need to discuss Blended finance is going to be very
important from this perspective because when we are discussing a
topic like water, sustainable water management, it is critical. It's
a role where the governments and public sector plays a
critical role, and that's why we need the blended finance discussions.
(11:35):
We need to have more partnership discussions between the public
and private sector. We need to make sure that we
get the policy integration done where the blue finance gets
embedded in the national development plans and budgets and discussions, right,
because we cannot discuss blue projects or blue financing in
(11:57):
the isolation of the national development plans and agenda. These
things need to go hand in hand because these are
some critical resources that we need in the future, and
that's why it's important that we can align these topics.
So I think that's what we need more and then
I think that you're going to see the investor demand
following from that perspective as well. Yeah.
Speaker 2 (12:19):
Absolutely, And I think of course everything gets back to
financial materiality, and it's pretty clear water underpins the economy
and actually it's just generally essential to human life. And
as you mentioned that statistic that fourteen of the seventeen
most stress countries are coming from the Mena region, and
this region covers around ten percent of the world's land
(12:40):
area that holds only one percent of its freshwater resources.
So it really is critical to be bringing together different
stakeholders to finance such a critical resource.
Speaker 1 (12:51):
And we are.
Speaker 2 (12:51):
Increasingly seeing water scattery risks having to be integrated into
financial decisions. I think one area where we're seeing a
lot of development is around data centers and the very
water intensive nature of their operations and financiers and investors
actually having to look at these assets and map out
what the kind of future wall scarce risks are and
(13:12):
having to include that in any credit lines that they're issuing,
and also look at the opportunities that they're financing as
well within the marine space. And I think you definitely
touched on this already, but nature is notoriously more challenging
to finance than carbon. Everyone i think can get their
heads around the concepts of one ton of carbon, but
it's harder to get that kind of one metric for nature,
(13:33):
and that is a significant challenge for investors when they're
quantifying the risk and opportunities around nature. I think first
Abidabi Bank have recently published the first TNFD aligned reports
of course, embedding nature like water, use, waste, biodiversity into
the assessments, and I'm curious what kind of key challenges
(13:54):
and maybe more importantly, what the key findings that saw
the need for action despite those lunches within nature, Resking opportunities.
Speaker 3 (14:03):
So you're absolutely right, Grace. The nature related risks are
much more complex and then less standardized than carbon right,
which makes them much harder to quantify and also finance.
And this is exactly the reason that we started working
on the topic of nature one and a half years ago,
(14:24):
to start understanding that how do we build our internal
understanding and capabilities on the topic of nature, How do
we understand the market we're operating in, so what is
the priorities of the UEE and the region when it
comes to nature, and how can we start this work?
And this is the work we started and started to
(14:45):
look towards the TENFT framework to say, let's start by
the TENFT framework, let's start following that framework, understand our
own strategy, understand the governmance we need to set up.
From this perspective, let's start looking into the risks we
have in our portfolios so on, and that eventually concluded
into us publishing our first team FG report that was
(15:06):
published in Generary. But this was actually an exercise that
started much longer ago for us, basically building our own capabilities,
and this assessment gave us actually some critical findings. As
an example, the water consumption and waste generation. How that
is emerging as an with this abrosi operational impact into
(15:29):
these sectors we finance. Right, it's also about the sectorial
dependencies when it comes to biodiversity and the ecosystem services.
It's also about the need to embed nature into our
financial products but also our policies and our assessments when
(15:50):
we're doing those right. So we have been very focused
on doing esg assessments of our clients, typically focusing on
the topic of climate, but not really bringing in nature.
And also the complexity with nature is also that nature
is multiple things. Nature is water, it's forest, it is
(16:10):
a biodiversity and so on and so on. So there's
many layers on the topic of nature, so it requires
a lot of understanding. But also the challenges with data
are huge. Right. So just once we are discussing the
challenges on data on climate, well is said ten times
(16:33):
worse if not more, discussing nature because a lot of
our clients, portfolios and governments, etc. Don't have this data,
or don't publish this data, or do not understand the
way to use this data as well. Right, because sometimes
we first of all, we were surprised about how much
(16:55):
data we did not have and once we then started
working on to say that, you know, what are the
kind of insights we can find based on this, right, So,
how can we start using due location data to better
understand the exposure we are having towards some of the
challenged industries and sectors which are dependent on the topic
(17:19):
of nature and biodversity. This can be like agriculture, real estate,
and tourism. So you just need to start breaking it
down step by step, which takes some time, and take
some time to understand these sestors as well in detail
and then start working on them. But it's also important
to understand that it is critical to work with them
(17:42):
right because when we look at the facts that are
around us, more than fifty percent of the global GDP
is moderately or highly dependent on nature, right and when
we look into the nature, climate solutions could help deliver
thirty percent reduction in emissions by twenty thirty. So there
(18:06):
are some clear opportunities and risks we need to focus
on when we discuss the topic of nature. And that's
where that TNFD framework is a really good starting point
that it helps you understand where do you stand from
a nature perspective and how do you start defining a strategy,
(18:27):
a governance, understanding your risk, start looking into the opportunities
that you can work with. And I think that was
really really important for us in our journey to enhance
our focus on nature.
Speaker 2 (18:39):
Yeah, I think it's so interesting to kind of hear
about the process. I speak to a lot of whether
it's banks or investors, they kind of jump to the
end stuff and they're saying, well, our clients they report
the data and therefore it's too challenging. But actually just
to hear taking the step back, kind of taking that
step by step and how important it is just to
be able to get that insight into what are risk exposures. Also,
(19:02):
I guess increasingly where do the opportunities lie? And I
think even some of the stature gave around the water
supply and demand mismatch or how critical this work really
is and why it's so important to be embedding these
kind of risks and around nature into both kind of investments,
credit lines when doing kind of financial analysis, and why
(19:25):
it's financially fundamentally financially material. I know you alluded to
this earlier, but how important the kind of role of
blended finances in the water space, the nature space of
course that as one but I think we've seen mixed
results around blended finance globally.
Speaker 1 (19:45):
But actually we've seen some.
Speaker 2 (19:47):
Pretty effective examples within THEE perhaps compared to some other regions.
It'd be really great to maybe hear some examples of
where it's worked effectively and what lessonsly other markets could
take away from these experiences.
Speaker 3 (20:06):
I think you're absolutely right when I when I look
into a lot of other markets and see how blended
finance has developed, I think UEE has a unique track
record on bringing the public ambition and the financial strength
and the institutional coordination that that helps them really mobilize
(20:30):
the capital that is needed. Right. So, we saw during
the COP twenty eight that the UA banking sector made
a commitment to mobilize one trillion dirhams to sustainable finance
by twenty thirty. And this was a clear signal by
the banking industry stand alone that you know, we are
here to support and it's a national priority to support this.
(20:53):
And then the industry have gone and work with the
public sector to say that how can we mobilize this
capital to support on the important transition that UAE is
going through with its ambition of achieving that zero by
twenty fifty. And I think what we are also seeing
is the UAE's ability to liaise with all the stakeholders
(21:15):
and established structured risk sharing as well. Right. I think
when I saw some latest data was that in the
Mena region we have seen eighty three blended finance transactions
which totals fourteen billion US dollars, right, with Ue emerging
one of the leaders in some of these vehicles and
(21:37):
a lot of these sectors that have been focused has
been around infrastructure, it is energy, it is financial services
that is coming to this and I think when we
look at it, the Ue government has pledged one hundred
and twenty five billion US dollars towards the net zero
goals it needs to achieve. However, the total investment that
is needed is well above five hundred billion, right, And
(22:01):
that's why the blended finance helps bridge the gap. And
I think one of the reason is that, you know,
you have a leadership that is bringing together the policy makers,
the private sector, the public sector to say here is
a challenge, here is a gap we need to close.
How can we do this? And we've seen enormous examples
(22:23):
of this. When we look back to COP twenty eight,
we saw the public sector, we saw the private sector
coming together. We saw how during COP twenty eight, just
in the first week, we saw significant commitments and mobilization
of finance to really act on these things. So I
think that the model UAE have seen, which we are
(22:44):
also starting to see in other markets, is really putting
the policy makers, public sector, private sector together and say
we have an ambition, how can we work from that perspective.
I think a good example is the work on the NDCs, right,
So when you updated its NBC, it's it was more
ambitious than it was before. However it's still brought together
(23:08):
the private sector to say that these and these industries
will be impacted. How do we address this challenge together? Right?
And I think that's very important that you bring that
private public sector partnership to achieve this. It's not just
policy makers making policies. It's basically a model where you
(23:29):
bring the governments, you bring the DFIs, you bring the
commercial banks to work together to say that how can
we unlock a capital at scale for climate and nature
positive solutions and outcomes? And I think that that seems
to be a recipe that has worked really really well
in the UAE and in the Vibry region as well.
Speaker 2 (23:51):
I think it's so interesting because a lot of these
topics actually need such an array of expertise and these
the financial expertise and the scientific expertise use and nature
is particularly challenging as a topic. Getting into the finding
details and bring it all together is absolutely key for
driving progress. And of course we talk about the momentum
(24:11):
around climate and around nature when we're talking about resources
like water where it's of fundamental public interest as well
as the kind of commodity that we really need to
bring together these multiple stakeholders to drive progress and ensure
that we're conserving it as a resource.
Speaker 1 (24:29):
So nature and climate are very much intertwined. And I
think you.
Speaker 2 (24:33):
Talked about some of the use of proceeds for the
blue bonds looking at things like mangroves, and of course
mangro is actually critical in terms of adaptation finance as
well as climate finance, and we're seeing a lot of
growing momentum in this area where nature can play a
role in both resilience and adaptation. I think you mentioned
(24:53):
that nature can actually help us move towards our carbon
goals and help deliver thirty percent reduction in emissions twenty thirty.
So there's a lot of opportunity in the nature space.
In fact, I think it was an Abi Dabi where
they had one hundred million.
Speaker 1 (25:07):
Dollar Mangrove project.
Speaker 2 (25:08):
And I'm just curious about your take on the interaction
between climate and nature adaptation and where this kind of
finance is being mobilized to both those aspects as well.
Speaker 3 (25:21):
I think you're absolutely right, Grace. If you look at
nature based solutions like Mangrove, they basically have a dual
purpose assets, right. So one side they mitigate, right because
the climate change by sequestering the carbon, but also adapt
by protecting coastlines from storm surges, is flooding and so
(25:45):
on as well. So I think that the key is
basically that how can we mainstream nature into the financial
decision making right and where the blue bonds are proving
to be a strong just to do that. But we
also are starting to see a growing investor interest and
(26:07):
we're starting to see guidance as we discussed before now
coming into place. We're entering into a new phase where
adaptation finance and can be scaled through innovative instruments that
can get rooted into nature. Right, because if we go
back five years ago, where bluebonds wasn't really under discussion,
(26:29):
what we saw was a lot of green financing just
happening under the green bonds. And now since the topic
of climate and green has increased significantly, rightly, so we
need to make sure that the focus on nature is
also intact, right And that's why having an innovation in
(26:51):
the blue bonds specifically can help you achieve this. And
I think that's gonna be that's gonna be important, right,
And I think that's where the financial industry can play
a role. We can't do it by ourselves, right. The
financial industry need the support from the policy makers, It
needs the support from the public sector, it needs the
(27:11):
support from the rest of the private sector, It needs
the investor interest to continue growing from that perspective as well.
And I think once we get to that point that
all these different forces are aligning, I think we will
see a significant growth into the blue financing aspect as well.
Speaker 2 (27:31):
Yeah, And I think what's interesting is perhaps maybe at
this point in time in the region actually sustainability, nache finance,
climate finance is much more seen as an opportunity I
think rather obviously it's around the rest the very real risks,
but it feels like a more optimistic outlook and the
(27:52):
financial opportunity sets rather than just looking at it as
a problem, which I think helps kind of drive that
momentum memorizing how important these.
Speaker 1 (28:01):
Different aspects are.
Speaker 2 (28:04):
Leue is definitely positioning itself as a global hub for
sustainable finance. Curious what opportunities do you see for the
Gulf to become I say, become a leader in blue
and nature finance globally, but actually very much leading the way.
And I guess we have touched on this, but what
evolving products are you excited about? I think it's so
(28:27):
exciting to see the innovation in this in this space.
Speaker 3 (28:30):
Yeah, I think first of all, I think UEE has
proven itself over years to be a leader on the
topic of transition, on the topic of climate and now
also as we mentioned with iucn U and what a
conference coming to the ue as well over the next
(28:51):
twelve to eighteen months is a significant underlining of the
role UEES lay in the global topic of sustainability and
the and the transition towards a nature positive future, but
also a low carbon future as well. So I think
(29:12):
UE is uniquely positioned, and also, as we discussed before,
because UA has found this recipe of bringing the different
stakeholders together, right, I think I think UA has proven
again and again on the biggest stage like the COP
twenty eight, but also through these you know eighty plus
transaction we discussed previously, which are of course in the
wider region. I think the region has shown that, you know,
(29:35):
how can you bring all these different stakeholders together and
really start mobilizing capital and at a scale. When we
look at it from an FIB perspective, we see this
more than just a regional opportunity, right, We believe this
is a global opportunity to work on this. Right when
we look at the marine ecosystem, especially when it comes
(29:59):
to the blue carbon habitats like the mandrews, the seagrass meadows,
it's not just only the biodiversity hotspots but also powerful
carbon synks, right, So they play multiple roles here and
that's why we are very proud, you know, to have
been the first bank in the region to issue this
(30:20):
blue bond, and which is aligned with the global guidelines
and the best practices, and we want to continue seeing more.
We hope that many more banks follow follow this direction
as well, right, and this can happen in the region,
it can definitely also happen globally, so we hope that
many moors will will follow through. But also what's really
(30:41):
exciting for me is that, you know, we have now
started this journey with the topic of nature becoming more
and more important. When you look at the COPS sixteen
last time that took place in Colombia, I believe it
had the record high attendance, right, and we are seeing
the topic of nature getting more and more tension, more
and more focused, which is really needed, which will hopefully
(31:04):
also help with more financial innovation as well. For us.
Bluebond was the first step. Hopefully we will see much
more innovation coming from that perspective. This could be nature
link bonds as an example. You know, I believe that
hopefully we will soon also start seeing blue suit coops
coming through. We have already started to see as some
(31:26):
initial depth for nature swaps. We have started to see
nature asset companies or payments for ecosystem services. So we
have started to see different innovations coming through and hopefully
over the coming years we will really start seeing them
scale up. The ideal situation will of course be that
(31:47):
you know, we can get the blue bonds to the
level we are now with the green bonds. How it
is probably going to take a lot of time, but
I think that the UAE has shown by taking some
really really bold steps in this direction, and we as
FAB is proud that we can support on on on
this journey. And and it's important for us to you know,
continue supporting our clients in their transition, whether this is
(32:11):
related to climate, whether this is related to nature. We
do know that a lot of our clients and our
portfolios are impacted by by nature as well, and and
plays a really really important topic and team, so it's
important for us to liaise with them as well to
say that, you know, how can we best support them
into into this transition and and support them with understanding
(32:36):
their impact on nature and collaborate on that topic.
Speaker 2 (32:40):
Yeah, I think it's it's so interesting that nature essentially
does have multiple returns on investment, has the carbon zinc.
It has obviously positive implications for bid de US team
regulating our ecosystems. So it's a really exciting area for
seeing kind of what innovation and we have seen that
here a lot in the last kind of a few years,
and that momentum building. I think even you hear people
(33:04):
maybe who don't sit in the space of sustain of finance, ESG,
but things are impact in their companies so without even realizing,
they are engaged in the nature space. And I think
we've got an exciting few months coming up in the
space we've got as you mentioned that, I see n
World Conservation Congress and ABI ABI. Of course we've got
COP thirty in Brazil and November, and next year it's
(33:27):
the UN Water Conference. So there's a lot of momentum
going on. I think we have really touched on this.
But what are you kind of hoping for here? What
outcome is obviously it touched on a massive amount of topics,
but what should the golf regent really be pushing for.
Speaker 3 (33:45):
I think I do hope that you know, we start
seeing a unified push for nature positive binets, right because
at this point we are still seeing a few use
cases examples popping up here there. You've seen the blue
bond issuance from from fab Now we have seen some
(34:06):
similar issuances from some other banks globally, but ideally we
need to be in a place that you know, these
issuances are these transactions should not be unique, right. We
need this big push to to basically make blue financing mainstream, right,
So I think I think that that's going to be
really important. I also hope, which is really important for me,
(34:28):
is that you know, we need to start seeing integration
of nature into the NDCs as well, right, because NDCs
have been very focused about climate, and we do know
and we have seen this historically that once you really
get things into your NDCs, we start seeing the policy
makers moving into that direction. We start seeing the public sector,
(34:50):
the private sector moving and that's where we really start
seeing the needle moving, right when you get all these
parties in and I think, what you really need to
move of a topic of na we really need nature
to be embedded into the government plans. Right. I think
that's going to be really really important. So that's something
I hope. Then, of course, I think we always speak
(35:12):
about this global standards. It's going to be important, and
you know, on the topic of climate, we've now got
iss B as well. Finally, but I also think that
you know, we need to figure out what's going to
be the global standards for nature disclosures, right, so we
need to think about that. You know, how can nature
disclosures get embedded into maybe iss B, You know, how
(35:37):
can we work from that perspective so it becomes much
more clear, but also easier and simpler for organizations to
work with this, right because when we want some pragmatic
solutions that are not complicated for companies and etc. To
work with, right, because we don't want to be in
a situation that you have more people doing your reports
(35:59):
and compliance less people who are actually trying to make
a difference for the blue finance and the blue economy.
So I think that that's going to be an important
balance to manage. But I think I think those are
some of the topics that I really hope that we
can see over the coming time really emerge into something
(36:20):
that can help us create a difference.
Speaker 2 (36:21):
Yeah, I think is very interesting times ahead. And I
think it is very interesting in nature that it's often
thought as very geo location specific to certain assets and
things like that, but actually in the greater system of
regulating climate globally, it's key to kind of get that
global framework and people on board aligned going forward, I
(36:44):
think perhaps a more fun question to end on. But
of course we've seen green bonds scale and well blue bonds,
they are very specific in the outcome. Which do you
views having greater propensity to change the world.
Speaker 3 (37:04):
That's that's that's a good question, not an easy one
to answer.
Speaker 2 (37:09):
I think.
Speaker 3 (37:09):
I think for me, green bonds change the world by
the volume, right, because they have the skill. But I
think the the blue bond changed the world by its depth, right.
And I think I think, you know, when we need
to put them together, we will see a much more
sustainable future. But but we do need I think blue
(37:34):
bonds and blue finance have a specific place that is
going to be very very important in the years to come.
That can really help us make that change. And and
I don't think that the green bonds can do it
by themselves. I think that, you know, blue bonds will
play a key role. However, I do expect that the
(37:55):
green bonds will continue to have the largest volume and
because they create that change through the volume, but I
think that the details and the focused change that is
required will come through the blue bonds.
Speaker 1 (38:14):
I think that's a very good answer. We need both.
Speaker 2 (38:18):
I think it's really exciting to see and hopefully blue
bonds can really scale. We'll begin to see them become
more mainstream and nature being integrated into NDCs and seeing
more kind of global standards for nature. I think they
really do have a propensity to have a massive impact
and actually greater awareness of the implications and the impact
(38:40):
of driving finance into blue spaces. I mean that blue
bonds are going to be really critical going forward. It
has been absolutely fantastic to hear from you and the
work around blue bonds and nature finance and the real
kind of pioneering and to work that first Abi Dabbi
Bank is doing and of course the EAE is doing
to build up that infrastructure to allow sustainable finance to
(39:01):
scale and more specifically nature financed to scale. So thank
you so much for joining us.
Speaker 3 (39:08):
Thank you so much for having me, Gracefly appreciate it.
Speaker 2 (39:10):
You can find more information on sustainable finance by going
to ESG and Sustainable Debt on the Bloomberg terminal.
Speaker 1 (39:17):
If you have an.
Speaker 2 (39:18):
ESG quandary or burning questions you would like to ask
BI expert on this, send us an email at ESG
Currents at bloomberg dot net.
Speaker 1 (39:26):
Thank you,
Host
Eric Kane
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