The Arab Federation of Capital Markets (AFCM) has recently indicated that initiating carbon markets within the Arab region, via regional stock exchanges, is pivotal for spurring a surge in green financing.
The report further suggests that carbon markets represent a move towards adopting sustainable practices within financial markets, which is a pressing need for the Middle East and North Africa region.
It highlighted that Middle Eastern nations have started implementing concrete measures for ecological transformation and carbon footprint reduction, aligning with the Paris Climate Accord. Notable measures include the Dubai Financial Market’s pilot scheme for carbon certificate trading and the EGX’s inauguration of Africa’s first voluntary carbon trading market.
The report emphasizes that realizing zero carbon emissions in the region necessitates a unified effort from all societal stakeholders, including governments, financial entities, and corporations, which must collaborate to fulfil sustainability objectives. Addressing climate change risks is deemed a critical endeavour.
Additionally, the AFCM is confident that the asset and wealth managers’ drive towards zero carbon emissions will gain considerable momentum both in the Middle East and on a global scale.
The Asset Managers Initiative stands as a significant player in the worldwide effort to combat climate change, aiming to transform investment strategies and spearhead the shift towards a net-zero economy. The initiative has evolved into a robust network, encompassing 315 asset managers overseeing assets worth $57trn, marking a substantial paradigm shift.
This initiative is a key factor in steering the financial sector towards a sustainable future. Through fostering collaboration, accountability, and innovation, it underscores the crucial role asset managers have in mitigating climate change risks and capitalizing on green investment prospects.
As more asset managers pledge allegiance to net-zero investment standards, the worldwide shift towards a low-carbon economy transitions from a mere possibility to a pressing necessity.
Rami El-Dokany, Secretary-General of AFCM, remarked in the report that the Middle East and North Africa region confronts several climate change-induced challenges, including water scarcity and energy instability. He asserts that regional bodies must play a decisive part in overcoming these challenges by endorsing a zero-carbon economy transition.
El-Dokany advocates for institutions to engage in zero-carbon initiatives, whether they are asset managers’ campaigns or other similar movements.
“By aligning with these coalitions, institutions in the MENA region can connect with a cadre of global sustainable finance leaders, exchange and adopt best practices for transitioning to a net-zero carbon economy, and access resources and tools that facilitate action, showcase their sustainability commitment to investors, clients, and other interested parties, and guarantee that the region reaps the benefits of shifting towards a net-zero economy,” he stated.
He concluded that such global partnerships would enable the entire region to optimize the benefits derived from the transition away from carbon emissions.
