Climate change is one of the biggest challenges that central banks and financial institutions around the world face and they should work together to mitigate climate risk and boost the resilience of the global economy, the governor of the Central Bank of the UAE said.
Central banks and other financial regulatory authorities should continue to develop “safe and effective” supervisory frameworks that can promote green finance around the world and help enforce management and disclosure of climate risks by financial institutions, Khaled Balama said in a keynote address at The Future of Finance conference in Dubai.
“A greener financial system will contribute to sustaining economic and financial growth and diversified sources of income,” Mr Balama said. “We should work together to enhance the resilience of licensed financial institutions to face the risks of climate change.”
Mr Balama’s comments come as central banks and financial institutions step up green finance as the world seeks to build back better after the pandemic.
The Covid-19 pandemic has also underpinned the need to invest in meeting the UN climate goals and make the transition to a net-zero economy. The 2015 Paris Agreement mandates that countries lower their carbon emissions to meet the goal of capping the global rise in temperatures to 1.5°C above pre-industrial levels.
The UAE, the Arab world’s second-largest economy, last week unveiled plans to push for carbon neutrality by 2050 and invest Dh600 billion ($163.5bn) in clean and renewable energy sources in the next three decades. The push to achieve a greener future comes ahead of the Cop26 climate talks in Glasgow, Scotland, from October 31 to November 12 as the UAE builds momentum and prepares to “play its global role in combating climate change”, Sheikh Mohammed bin Rashid, Vice President and Ruler of Dubai, said at the time.
The launch of the UAE’s strategy of achieving carbon neutrality by 2050 is also part of the country’s efforts to contribute “positively to the issue of climate change” and transform the challenges in this sector into opportunities to guarantee a “bright future for the generations to come”, Mr Balama said.
(Except for the headline, this story has not been edited by The Finance World staff and is published from a syndicated feed.)
