The UAE’s banking and financial sector will mobilise more than Dh1 trillion ($272.5 billion) in sustainable finance by 2030, senior officials said at the 28th edition of the United Nations Climate Change Conference (COP28) in Dubai on Monday.

Khaled Mohamed Balama, Governor of the Central Bank of the UAE, said the banking sector, will need to contribute to both the UAE’s medium-term economic plans and the Strategy for Net Zero by 2050.

“Critically, this requires financing the transition and climate adaption strategies of corporate customers, which includes carbon-intensive sectors, but also allocating new funds to green projects,” he said.

Balama added that the current economic and sectoral structure of many countries means that the challenge facing financial institutions is significant.

The UAE Net Zero by 2050 strategic initiative is a national drive to achieve net-zero emissions by 2050, which is aligned with the Paris Agreement.

Addressing the repercussions of climate change is an immediate need and key to achieving sustainable socio-economic growth for all the countries around the world.

According to Climate Policy Initiative’s (CPI) Global Landscape of Climate Finance 2023, average annual flows in 2021-22 reached almost $1.3 trillion, doubling compared to 2019-20 levels.

Moody’s Investors Service said climate exposures by big global banks have increased over the past three years, but they still do not report in detail on how climate change might affect their financial performance.

Moody’s analysts said banks will be active in issuing new types of climate-focused instruments such as blue bonds, and debt for nature swaps to complement their diversified funding sources. In 2023, it expects global sustainable bond issuances to reach $950 billion, only slightly below the 2021 peak of $1.1 trillion.