ESG Focussed Banking in Core Aspects

Ajman Bank is an Islamic bank where responsible banking is a core value, and Environmental, Social & Governance (ESG) principles are intrinsic to its business model.

“As an Islamic bank, responsible banking is ingrained in our core processes and offerings. The recent increase in global and national commitment towards environmental, social, and governance matters serves as an opportunity for us to further enhance and structure our operations and business. We have strengthened our stance by aligning ourselves with both the UAE Environmental Vision 2030 and Ajman 2030 Vision,” informs Zohaib Ali Zahid, Head of Corporate Governance and ESG at Ajman Bank.

Zohaib considers the UAE’s national vision integral to the Bank’s future direction: “Supporting initiatives that drive socio-economic development, encourage investment, and improve commercial infrastructure in a sustainable way is how we integrate environmental and social considerations. Ajman Bank gives equal focus to both environmental and social sustainability. We are continuously expanding our strategic relationships with key stakeholders, including special economic zones, municipal authorities, chambers of commerce, mainland authorities, and other bodies to be at the centre of initiatives geared towards sustainable economic development.”

The bank’s environmental commitment is encapsulated in a straightforward two-pronged ESG vision: to reduce the impact of climate change on the Bank’s own business and to minimise the impact of its business on the climate. This vision guides the bank’s internal risk management, operational transformation, and externally directed business endeavours.

“We aim to leverage our core strength of specialization to help clients adopt sustainable business models, which in turn will enable them to benefit more from our sustainable finance programme,” explains Zohaib.

The bank is also establishing in-house advisory capabilities in its front-end institutional relationship management structures to support its client base.

While larger businesses have tailored their models towards sustainability, many small and medium enterprises (SMEs) have yet to address the realities of climate change. Consequently, ESG decision-making data is often unavailable for banks, impeding their ability to support such clients in transition and physical risk management. Zohaib views data availability as the biggest challenge facing the sustainable finance community globally.

With green financing becoming significantly popular worldwide and, in the UAE, Ajman Bank identifies and prioritises projects that have a tangible positive impact on the environment and society.

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