Gulf Bond and Sukuk Association (GBSA)
The Gulf Bond and Sukuk Association (GBSA) is proud to be cooperating with Clean Energy Business Council (CEBC) to promote sustainable finance in the Gulf region. This year saw our first Green Sukuk, a breakthrough $600 million issuance by Majid Al Futtaim which was well received by dedicated green investors as well as those looking for exposure to an investment grade company from the region. This achievement followed on First Abu Dhabi Bank’s debut green bond. More companies are expressing interest and getting up to speed on the requirements and benefits of green financing. This year, the volume of green bonds issued globally may reach $350 billion and with our region needing to transform its modes of energy production and consumption and to protect from climate change, we think the Gulf will contribute more and more to this volume.
Yet, our region is also home to a major investor community. And in terms of screening for Environmental, Social and Governance (ESG) factors, its early days, let alone for establishment of a dedicated green investor base. But there is no reason for this not to catch on among asset managers, sovereign wealth funds and family offices. Time and again studies have shown that returns on investment improve over the long term when investors focus on companies with solid ESG practices. Awareness can help and that is one area where we are cooperating with CEBC. Hot on the heels of awareness will come practice, i.e. building ESG and green principles into the investment process. With companies and investors involved we see a virtuous circle developing.