Green bonds market to accelerate the GCC net zero agenda

Green bonds market to accelerate the GCC net zero agenda

- In 2016-2020, green bonds in the region grew by 38%, and in 2020 alone, Middle Eastern governments drove 97% of green bonds compared to a mere 13% four years prior, reports BCG in its latest sustainability report.

Dubai, UAE – Green and sustainable debt issuance has been growing rapidly in the Middle East, despite the comparative lack of regulation of green financial instruments. In 2021, the total issuance of green and sustainability-linked debt in the region increased more than four times compared to 2020.[1] In these early stages of the climate transition, there is a critical need for patient, high-risk capital for investments in sectors whose paths to decarbonization are dependent on technologies that are still in the early stages of development, such as iron and steel, heavy road transport, and shipping. A new report titled “ Financing a Net-Zero Middle East” by Boston Consulting Group (BCG) shows how regulatory pressure in most Middle East countries is not yet strong enough to compel banks to take immediate action on climate issues, even though climate change poses an array of risks to their portfolio. Larger banks in fossil fuel-exporting countries typically have high exposures to the oil and gas industry and