First Abu Dhabi Bank (FAB) has made history as the inaugural MENA bank to release a climate report aligned with the Task Force for Climate-Related Financial Disclosures (TCFD).
The TCFD standard, championed by the Financial Stability Board since 2015, encourages entities to detail the resilience of their strategies concerning climate-related risks (both physical and transitional) and opportunities. This report fulfils FAB’s 2019 commitment to incorporate TCFD recommendations into its reporting and disclosure processes.
FAB’s TCFD Aligned Climate Report details progress in four key areas: governance model, strategy, risk management capabilities, and reporting on crucial metrics and targets related to climate change.
This framework aims to provide FAB’s investors and key stakeholders with insights into how the bank evaluates and addresses climate-related risks and opportunities, according to WAM.
Significant strides have been made by FAB in the following thematic areas
Governance: The organization integrates climate risk governance throughout, encompassing the Board level and various active committees.
Strategy: The bank incorporates climate considerations into its strategy through transition finance for net zero and sustainable finance targets for 2030. FAB’s scenario analysis informs the potential climate risk exposure.
Risk Management: FAB’s group-wide ESG Risk Framework covers the identification and assessment of ESG risks, subject to an annual review, according to The National News.
Metrics and Targets: Since 2019, FAB has been monitoring its Scope 1 and 2 emissions and has set emissions targets for financed activities, encompassing 90 percent of the bank’s portfolio emissions by 2030.
Shargiil Bashir, Chief Sustainability Officer at FAB, emphasized that adopting TCFD recommendations is a crucial step. It enables FAB to recognize, assess, and disclose climate-related risks and opportunities, fostering a standardized reporting process that enhances effective risk management. The adoption of this framework also contributes to building resilience in the entire financial ecosystem and across the UAE’s economy.
FAB’s alignment with TCFD recommendations follows a series of climate-related milestones. In October 2021, FAB became the first GCC bank to commit to net zero by 2050 by joining the UN-convened Net Zero Banking Alliance (NZBA).
Additionally, FAB is a signatory to the Principles for Responsible Banking (PRB), Principles for Carbon Accounting (PCAF), and the COP28 Net Zero Transition Charter, among other internationally recognized initiatives.