UAE’s growth is green and sustainable

Lately, financial models that don't have a negative impact on the planet have been pushed up the global agenda and gone mainstream. Highlighting this fact in October 2018, Larry Fink, CEO of BlackRock, the world's largest private asset management firm, told the Financial Times that sustainability will be a core component of how everyone invests in the future.
We know that impending disasters are among the inevitable consequences of climate change inaction that have the potential to gradually make earth uninhabitable, impacting vulnerable populations, disrupting business and casting a dark cloud over the future of our planet. The time to find a global financial solution is now.
We all know that the cost of doing nothing outweighs the cost of finding solutions, even if they generate a hefty bill. Multi-stakeholder cooperation and execution are the need of the hour. This is why green finance - investing in financial products that support companies or projects committed to the conservation of natural resources, production and discovery of alternative energy sources and other eco-friendly business practices - is an essential catalyst for change.
As we approach the Abu Dhabi Climate Meeting to set the agenda, recommendations and draft resolutions for the United Nations 2019 Climate Summit in New York in September, the focus is on multi-faceted planning to identify solutions to the greatest existential crisis of our time. It involves coming up with the financial resources, a new technology framework and enhanced transparency by governments, business leaders, supranational entities and non-government organisations, and examining how to keep global warming below 1.5 degrees Celsius as per the ratified Paris Agreement.
Looking at the UAE, our economy might have been built on oil but has since steadily diversified into other industries. Environmentally focused investment is a major vehicle for change that has gathered momentum on the global stage in recent years.
So why are UAE investors placing such emphasis on the green economy? A major contributing factor is our government has continued to prioritise environmental targets and policies since the formation of the federation, while highlighting the niche for eco-investments to investors.
Green finance encourages private sector investments in nascent and burgeoning areas such as renewable energy, sustainable water management and green infrastructure that generate economic returns while working towards climate change mitigation and adaptation. Increasing attention is being paid to the positive environmental impact of an investment, and not just the returns. People, planet and profit make up the trinity of green finance models.
A key pillar of the Dubai Clean Energy Strategy was the establishment of the Dh100 billion Dubai Green Fund to facilitate easy, low-interest loans for investors in green economy projects and to leverage the benefits of public-private partnerships.
We have diversified finance models with new green bonds to enable investors to access sustainable projects while providing issuers with affordable funding to run these projects. At US$167 billion, green bonds account for a small fraction of the global bond market, valued at over US$100 trillion as of 2018. Therein lies the potential, and this is where the UAE is angling to be a pioneer.
However, investors still face challenges in determining whether their green investments are truly green, or if the issuers' overall environmental commitment throws up some barriers to entry and operation. Ultimately, the onus lies with regulators to implement globally accepted standards that guard against misleading claims.
With the intent to strike the right balance, the UAE has an ambitious pipeline of green projects, from solar power plants to low-carbon infrastructure and clean transportation, while simultaneously trying to boost demand for capital and new green financial instruments.
The move towards green investments has been largely attributed to the millennial generation that forms a huge and influential investor group. Millennials are leading the charge in responsible investing and moving away from the common pitfalls of the financial industry, such as short-sightedness and thirst for quick profits. Fully aware that they will have to live with the consequences of what happens right now, young people are demanding climate action while there is still time to rectify the wrongs.
As leaders, we must pay heed to both our people and our planet. The facts have shown that ecosystems, habitats and species are deteriorating or vanishing at rates that are unprecedented in human history. As we continue exploring financing green investments, seeking alternative sources of energy and lowering carbon emissions as solutions, the writing is irrevocably on the wall for anyone with a conscience - the time to act is NOW.
Dr Thani bin Ahmed Al Zeyoudi is UAE Minister of Climate Change and Environment.