The UAE Sustainable Finance Working Group (SFWG) has introduced the ‘Principles for Sustainability-Related Disclosures for Reporting Entities’ as part of a collaborative effort among UAE regulatory bodies to enhance sustainability-related disclosure requirements for financial institutions in line with international standards. This initiative aligns with the declaration of 2024 as the ‘Year of Sustainability’.
These principles represent a consensus among SFWG members regarding the minimum expectations for sustainability-related disclosures within their respective jurisdictions. They aim to guide the development and implementation of disclosure frameworks focusing on environmental, social, and governance (ESG) factors.
The Securities and Commodities Authority (SCA) hosted a gathering of working group members to announce the launch of these principles. Signatories included Mohammed Ali Al Shorafa Al Hammadi, Chairman of the SCA; Khaled Mohamed Balama, Governor of the Central Bank of the UAE (CBUAE); Essa Kazim, Governor of the Dubai International Financial Centre; and Emmanuel Givanakis, CEO of the Financial Services Regulatory Authority of Abu Dhabi Global Market (ADGM).
Mohammed Ali Al Shorafa Al Hammadi, Chairman of the SCA, expressed gratitude to the UAE SFWG members, emphasizing the significance of these principles in advancing the UAE’s transition to a sustainable green economy. This aligns with the National Climate Change Plan 2050 and aims to bolster the UAE’s global competitiveness while establishing it as a leader in climate neutrality.
The SFWG’s ongoing efforts to promote sustainable finance include the introduction of robust guidelines for transparency and disclosure among financial institutions, in accordance with international standards. ADGM, inspired by these principles, has implemented its own ESG Disclosures Framework to enhance transparency and accountability in sustainability reporting.
Essa Kazim, Governor of the Dubai International Financial Centre (DIFC), highlighted DIFC’s commitment to sustainability initiatives, reflecting the broader objectives of the UAE’s ‘Year of Sustainability’, the Paris Agreement, and the UN Sustainable Development Goals for 2030. He emphasized the role of the financial sector in addressing climate change and fostering a transition to a sustainable economy.
The principles underscore four key considerations for reporting entities: (1) establishing adequate policies, procedures, and systems for sustainability reporting; (2) prioritizing transparency, materiality, relevance, and stakeholder engagement in disclosures; (3) aligning disclosures with operational practices, including governance, strategy, and risk management; and (4) enhancing transparency and quality in sustainability-related product disclosures to market participants.
