ESG can help GCC banks unlock opportunities for growth

ESG can help GCC banks unlock opportunities for growth

The report, ‘Achieving environmental, social, and governance impact - The business agenda of the future for GCC banks’, revealed that, in the GCC, banks too often confine ESG efforts to reporting, where they have improved considerably compared with a few years ago.Dr Yahya Anouti, partner with Strategy& Middle East, said: “ESG is about more than reporting and not exclusively about doing good for the environment or the society. It can also be a business opportunity to reduce costs, increase productivity and revenues, and meet the needs of ESG-centric customers. By leading on ESG issues, banks generate ESG and bottom-line impact.”

Overall, global sustainable investment assets grew from $13.3 trillion in 2012 to $40.5 trillion in 2020, with shares of global professionally managed assets increasing from 21 percent to 35 per cent during that time frame. In 2020, the Dubai Financial Market launched its first ESG index, while the value of green bonds issued in 2020 in the Middle East was almost twice that of those placed in 2014. Similarly, in 2020, the Saudi Electricity Company placed the first green bond that was compliant with Islamic law (sharia) in international markets.GCC banks, like their global peers, are experiencing growing pressure from stakeholders