Khaberni - Arab Bank announced the launch of the updated version of the Sustainable Finance Framework, which aims to support the bank's sustainability orientation and enhance its integration into the bank's financing activities within a clear and reliable framework. The launch of this version aligns with the bank's strategy in environmental, social, and governance (ESG) pillars and its comprehensive vision to provide a long-term positive impact through responsible banking practices in those areas across its regional network.
The updated version of the framework aligns with international standards in sustainable finance, affirming Arab Bank's ongoing commitment to making a positive impact through its financing decisions. The updated framework includes a broad range of sustainable financial activities specifically designed to support clients in transitioning towards more sustainable and responsible practices, particularly enabling companies operating in high carbon emission sectors to support and assist them in transitioning towards reducing carbon emissions to as close to zero as possible.
The framework covers three main types of sustainable financing axes: financing dedicated to specific sustainability purposes, which allocates funds for qualified green and/or social projects; sustainability-linked financing, which ties financing conditions to achieving specific goals or performance indicators in sustainability or environmental and social governance; and transition financing, which aims to support high carbon-emitting industries to encourage them to reduce greenhouse gas emissions.
The updated framework extends to encompass a wider scope for the bank by offering a variety of eligible financing categories, contributing to a positive impact on environmental and social aspects across various sectors. Additionally, the framework serves as a fundamental pillar for the bank to issue sustainable debt instruments geared towards financing projects that will help tackle climate change challenges, create job opportunities, and support achieving the Sustainable Development Goals set by the United Nations.
Arab Bank aims to integrate the Sustainable Finance Framework into the bank’s operational system and then engage stakeholders including clients, investors, and regulatory bodies, as well as enhancing the expertise of the bank's team, contributing to the unification of efforts and integration towards achieving the bank’s goals in sustainable finance and enhancing its positive impact on local and regional levels. In connection with enhancing sustainability efforts, the bank recently joined the "Partnership for Carbon Accounting Financials" (PCAF), a leading international initiative that aims to unify methodologies for measuring and disclosing carbon emissions associated with the activities and funding provided by financial institutions. This membership is part of the bank's strategy to implement ESG governance, as financed emission measurement is a fundamental element in enhancing the understanding of the climate impact of the bank’s finance portfolio and supporting effective management of risks and opportunities associated with climate change.
By adopting PCAF methodologies, the bank is keen to develop its institutional capabilities in collecting climate data and enhancing its quality, enabling the building of a more accurate and reliable database on the carbon footprint of provided financings. This consistent and phased disclosure aligns with best international practices and supports the strategic decision-making process and directing capital towards activities and projects that align with the bank’s environmental goals and sustainability priorities in the medium and long term.
It is noteworthy that the updated version of the Sustainable Finance Framework has been subjected to an independent review by a global specialized company, which issued a Second Party Opinion (SPO), which confirmed its alignment with international standards related to sustainable finance, thus enhancing its credibility, transparency, and supporting Arab Bank's commitment to the highest levels of governance and sustainability in its financing activities.
To view the updated version of the Sustainable Finance Framework, click here.
