As the fourth-year anniversary of the United Nations Principles for Responsible Banking (PRB) approaches, GEFI, in partnership with PwC, hosted a private Path to COP28 round table in Dubai focused on the UN PRB.

The aim of the roundtable was to discuss the engagement of Middle East banks with the Principles. Key points of the discussion, held under Chatham House Rules, included an overview of the Principles, the engagement to date with the Principles by Middle East-based financial institutions, challenges faced by Middle East-based financial institutions, the need to balance economic development and decarbonization, leadership and training initiatives, aligning the Principles with business strategy, and transitioning to sustainable financing.

PRB Principles Overview

The PRB encompasses six principles that guide banks in aligning with international agreements, setting measurable targets, collaborating with clients and customers, engaging with stakeholders, fostering sustainability as part of the bank’s governance and structure, ensuring transparency and promoting accountability.

PRB Engagement in the Middle East

While some regional banks have become signatories, others are in the process of assessing integration challenges. Engaging ministries and central banks, addressing high emissions per capita, and tackling biodiversity challenges were discussed as priority areas.

Challenges Faced

Data challenges and varying levels of awareness were identified as key obstacles for Middle East banks. The region’s banks struggle with numerous frameworks and lack awareness among clients. Establishing robust data tracking mechanisms and increasing PRB awareness were deemed necessary.

Balancing Economic Development and Decarbonisation

Middle East banks were urged to take collective action in achieving Paris Agreement targets. Balancing economic growth with decarbonization and emphasizing a just transition were highlighted as key challenges. Banks in the region are increasingly setting climate change targets and strengthening their impact assessments.

Leadership and Training Initiatives

Middle East banks recognized the leadership opportunity in ESG practices and emphasised the need to educate businesses, viewing it as their duty. Training initiatives are prioritised to prepare banks for the future and create demand for sustainable practices.

Aligning PRB Principles with Business Strategy

The alignment of PRB principles and objectives with business strategy was deemed essential. Both top-down and bottom-up approaches were acknowledged as necessary for successful integration within organisations.

Transitioning to Sustainable Financing

Banks in the Middle East recognise the challenges in transitioning away from fossil fuel financing. A strategy of parallel investment into sustainable alternatives while on the journey of divestment was considered as an accommodating and just route for the region. This transition was viewed as a profitable opportunity through supporting long-term sustainable companies.

Collaboration and support for evolving climate targets were seen as crucial steps forward. The discussion emphasised the importance of collective sign-up to the PRB among Middle East banks. Overcoming challenges, aligning with PRB principles, and contributing to a sustainable future were highlighted as key goals. By embracing the PRB, Middle East banks can play a vital role in global efforts to combat climate change and foster a low-carbon economy.

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