UAE retail investors can mobilise more than $100bn towards top ESG priorities

According to research, the UAE has high potential for growth in sustainable investing, largely due to its rising domestic wealth

Standard Chartered’s Sustainable Banking Report 2022 shows how retail investors in the UAE can mobilise more than US $100bn towards top Environmental, Social and Governance (ESG) priorities – particularly the financing of the transition to Net Zero.

In the report titled ‘Mobilising retail investor capital’, Standard Chartered explores ESG investment opportunities; it explains how this capital could play a critical part in bridging funding gaps in the UAE’s other ESG priorities, including food and water security, as well as pollution and waste management.

The new research also identified the massive sum of $8.17tn of investable retail wealth that could be channelled into sustainable investments by 2030 to finance ESG objectives in 10 growth markets. The report also highlights the investment barriers currently faced by investors and recommends solutions to expand sustainable investing (SI) into a mainstream asset class.

In September 2022, Emaar investors approved the acquisition of Dubai Creek Harbour and, later in the month, His Highness Sheikh Hamdan launched the Dubai Robotics and Automation Program.

According to the research, the UAE has high potential for growth in sustainable investing, largely due to its rising domestic wealth. The market could mobilise over $100bn in sustainable retail investment by 2030. Across the UAE, more than 40% of investors respectively want to put their money towards addressing climate issues, the report noted.

The top ESG priorities for investors in the UAE include:

  • Climate change and carbon emissions (38%)
  • Energy and resource use (31%)
  • Pollution and waste management (26%)

The report further highlights the need for investor and market-specific barriers that need to be overcome to translate this investor interest into actual impact.

In October 2022, Abu Dhabi-based Global Mission launched a $17bn fund to achieve the UN’s 17 Sustainable Development Goals.

Investors in the UAE identified the following as their top barriers to increasing their sustainable investments:

  • Comparability (47%)
  • Perceived low returns/higher risk (45%)
  • Comprehensibility (44%)

These findings demonstrate how financial institutions can play a critical role in unlocking available capital by breaking down the existing barriers for retail investors.

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