Mashreq Bank Leads UAE’s Sustainable Finance Surge, Eyes $30 Billion by 2030

DUBAI, UAE – As the United Arab Emirates accelerates its ambitious transition towards a green economy, spurred by national strategies like the UAE Energy Strategy 2050 and the Saudi Green Initiative (SGI), financial institutions are increasingly at the forefront of allocating capital towards sustainable projects. Mashreq, one of the region’s oldest banks, is emerging as a key player, committing to facilitate AED 110 billion (approximately $30 billion USD) in sustainable finance by 2030.

From Niche to Core: ESG’s Ascent in Regional Banking

The shift isn’t merely about adding a “green” department; it’s a fundamental reshaping of corporate DNA. Faisal AlShimmari, Head of ESG at Mashreq, emphasizes that sustainability and responsibility are no longer peripheral considerations but are now deeply woven into the bank’s operations, product development, and overall purpose. This evolution mirrors a broader trend within the UAE’s financial sector, driven by both government directives and growing investor demand. The UAE Banking Federation’s pledge of AED 1 trillion in sustainable finance at COP28 underscores the industry’s commitment to climate action.

This commitment is particularly crucial as the UAE diversifies its economy away from hydrocarbons. Banks, as the primary conduits of capital, are uniquely positioned to channel investments into renewable energy, green infrastructure, and sustainable technologies. AlShimmari notes that proactive leadership in this space allows institutions to shape emerging standards, access new capital flows, and maintain long-term competitiveness in a rapidly evolving financial landscape.

Regulatory Tailwinds and the Rise of Mandatory Reporting

The UAE’s commitment to sustainability is being solidified through robust regulatory frameworks. Federal Decree-Law No. (11) of 2024 on the reduction of climate change effects mandates that all entities monitor, report, and manage greenhouse gas emissions, develop climate adaptation plans, and implement sustainable practices. This legislation, coupled with initiatives like the Sustainable Finance Working Group chaired by the Ministry of Finance, is creating a clear pathway for businesses to integrate ESG principles into their operations.

The move towards mandatory ESG reporting is a significant development. According to a recent OECD report, global sustainable investment reached $6.6 trillion in 2022, and the trend is expected to continue as transparency and accountability become increasingly important to investors. This increased transparency is helping businesses align more effectively with national climate goals and attract capital from environmentally conscious investors.

Beyond Lending: Innovation in Sustainable Finance

Mashreq’s approach extends beyond traditional lending. The bank has been involved in landmark transactions, including a $3.25 billion sustainability-linked facility for GEMS Education and a $2.5 billion deal for Bapco Energies, supporting their energy transition efforts. Furthermore, Mashreq is actively participating in initiatives like the World Green Building Council’s Advancing Net Zero Framework and leveraging emerging technologies to enhance its ESG impact.

A recent example is Mashreq’s partnership with Ecolytic, which has integrated carbon tracking into its digital banking platforms, allowing customers to monitor the carbon footprint of their spending in real-time. The bank also successfully priced a $500 million Sukuk in April 2025, attracting $2.9 billion in demand – a six-fold oversubscription – demonstrating strong investor appetite for ESG-integrated financial instruments. This was the largest orderbook in Mashreq’s history, despite heightened market volatility.

Bridging the Skills Gap and Fostering a Sustainable Ecosystem

Despite the progress, challenges remain. AlShimmari acknowledges that one in three companies in the region still face internal skill gaps that limit their ability to effectively operationalize ESG. To address this, Mashreq is providing advisory services, developing sustainability-linked products, and launching the UAE ESG Ecosystem Government Accelerator – a public-private initiative aimed at inspiring and pushing the industry forward.

“For projects perceived as high-risk, tools like blended finance and sustainability-linked loans can help shift the risk-return profile and unlock capital,” AlShimmari explains. “Banks can also support clients in adopting recognized ESG reporting standards and utilize technology to improve data accuracy.” Mashreq’s Climb2Change initiative, which focuses on community-based environmental action, further exemplifies the bank’s commitment to holistic sustainability. The initiative has already removed over 6,800 kilograms of waste globally and positively impacted hundreds of local businesses.

Ultimately, Mashreq’s ESG journey demonstrates that combining purpose and profit is not only possible but also financially rewarding. As the UAE continues to prioritize sustainability, banks like Mashreq are poised to play a pivotal role in shaping a greener, more resilient future.