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Abu Dhabi Islamic Bank publishes its first ESG report

Abu Dhabi, UAE; 06 July 2022: Abu Dhabi Islamic Bank, a leading Islamic financial institution, has announced today the release of its first ESG report highlighting the progress made on the bank's Environmental, Social, and Governance (ESG) goals and commitments for the year 2021. The report builds on ADIB's  sustainability Report, which ADIB had been publishing since 2016.

This report details ADIB's ongoing efforts to address some of society's greatest challenges and build more sustainable, diverse and equitable communities. It underlines the bank's goal to embed Islamic values and sustainability at the core of its business and focuses on a wide range of topics, including governance and integrity, customer focus, commitment to the environment and society, community empowerment, diversity, equity, and inclusion.

Nasser Al Awadhi, Group Chief Executive Officer, said: “We are proud to present our first ESG report for the year 2021. It was an eventful year for us as we have achieved many milestones and strengthened our business model while putting a greater focus on sustainability by integrating it as a pillar in our new 5-year strategy plan. ESG and sustainability have always been a key element of ADIB's success. Our new strategy is aligned with the long-term economic interests of our stakeholders and the communities we operate in."

“ At ADIB, we are aware that sustainability is a journey that requires every individual to play an active role. We are committed to pushing our ESG agenda forward every year and inspiring our stakeholders to join us on this journey, “he added.

In 2021, ADIB launched 'Sustainable Future', a new pillar in its 2025 strategy bolstering its sustainability agenda and accelerating growth in areas that are most pertinent to emerging sustainability opportunities and challenges. The new strategy approach is guided by four pillars that include continuous innovation, a segment focus, digital excellence, and a sustainable future.

This report has been prepared in accordance with the Global Reporting Initiative (GRI) Standards . It is aligned to the UAE Vision 2021 as well as the UN Sustainable Development Goals (SDG). Among the many ESG initiatives, this report covers key highlights from the past year which include:

Accelerating Sustainable Finance

ADIB is committed to the growth prosperity of Abu Dhabi and the UAE, supporting the UAE's sustainability objectives, UAE Green Agenda 2015-2030, and the Abu Dhabi Economic Vision 2030. ADIB is a signatory to the Abu Dhabi Sustainable Finance Declaration which supports sustainable financing for economic development.

In addition, ADIB has a strong track record in supporting its clients to meet their own ESG targets, including the provision of ethical, socially responsible financing based on Shari'a-principles. ADIB is now working on developing a detailed ESG strategy along with a transformed ESG governance structure designed to accelerate commitment.

Enhancing Governance Model

At ADIB, the corporate governance model ensures transparency, accountability, and resilience. The existing governance structure is aligned with the bank's recently launched new strategy, framework, and policy. Under this pillar, ADIB ensures all transactions are compliant with the principle of Shari'a and focused on providing responsible banking while ensuring compliance with all laws and regulations. Enabling innovation is another area of focus, continuing with the digitalization journey and ensuring a strong governance and control measures for fraud management.

Driving the Transition to a Low Carbon Economy

ADIB has received 4 LEED certificates for green buildings in 2021. The bank acknowledges that ESG issues will be a crucial driver of both risk and opportunities for the bank. ADIB has embedded a sustainable future as a key pillar in its 5-year strategy plan and has announced its commitment to focus on launching an ESG strategy that helps banks transition to a low carbon operation and leverage on ADIB's commitment to social responsibility.

The Bank is working closely with the government and its customers to accelerate its efforts to transit to a low carbon  economy. ADIB aims to integrate ESG factors into its investment policy, launch new products in alignment with the ESG framework, review its portfolio from an ESG perspective, commit to sustainable financing and clearly define carbon emissions reduction targets.

Continuous Innovation in Shari'a-Compliant Banking Products

ADIB's national presence, innovation, relevance, and Shari'a compliant business model provides the right banking solutions for its customers, with a deep understanding of their needs and ambitions, their lives and plans. Over the past two years, ADIB has introduced innovative features and services that provide customers easy and convenient banking services. ADIB became the first bank in the UAE to perform instant and highly secure face recognition verification for account opening using the Ministry of Interior's facial recognition verification system.

Accelerating Green Financing and Investing

ADIB has been rated A by the MSCI ESG index and has participated in 11 green financing transactions.

ADIB is devoted to financing and supporting environmental and sustainable initiatives while strengthening its partnerships with stakeholders and market participants. All the project finance deals follow the Equator Principles (EP) which is a risk management framework, adopted by financial institutions, for determining, assessing, and managing environmental and social risk in project finance and other eligible financings.

Some of the key projects that the bank enabled and contributed to in 2020 and 2021 are:

  • ADIB funded USD 103.5 million to DEWA solar project: As per ACWA POWER, the project is expected to power 270,000 homes and offset carbon emissions amounting to 1.18 million tons per year in Dubai.
  • ​Supported Al Dharfa Project, the world's largest single-site solar power plant, by providing an Equity Bridge Loan for the project financing. It will use approximately 4 million solar panels to generate enough electricity for approximately 160,000 homes and will help achieve a reduction of 2.4 metric tonnes of CO2 emissions per year.
  • Funded the Jubail water treatment project in Saudi Arabia which will substantially contribute to the kingdom's efforts to ensure water security.
  • In alignment with achieving its environmental mission, the bank launched Al Ghaf Paperless Initiative in 2021. This initiative helped in reducing the bank's carbon footprint tangibly and helped save over 2 million sheets of paper in its first year of implementation. In addition, the Bank made a positive impact on communities through employee volunteering programmes and participated in various environmental initiatives.

Maximising Positive Social Impact

In an effort to build more sustainable, diverse and equitable communities, ADIB ensures it supports and contributes to initiatives that reinforce and foster Islamic values and principles in our communities. Last year, ADIB was one of the banks that partnered with the Ministry of Interior's Faraj Fund to implement a humanitarian campaign and initiatives that contributed to the release of insolvent inmates convicted with financial cases.. The bank also supports Emiratis by planning mass weddings since we understand that marriage can be financially exhaustive for young people. In 2021, 100 couples got married through ADIB's support.

Diversity and Inclusion

To ensure financial inclusion, ADIB launched a number of initiatives, such as the first digital Islamic bank for youth, “Amwali", to provide greater access to banking for youth and empower them to make better financial decisions, and “Business Connect", a new account package targeting SMEs that prefer doing digital banking transactions.

ADIB also recognizes the importance of a diverse workforce to delivering on its goals. The bank understands the positive impact women, who make up about 35% of its workforce, can have and their imperative role in the overall socio and economic development of this nation. Therefore, we focus on ensuring that we design products and services that allow us to be inclusive to female customers, enabling them to participate equally in the economic development and the long term and sustainable growth of our society..

Whether it's by developing new sustainability-linked financing solutions, offering support to its customers' need or financially empowering the younger generation, ADIB constantly innovates and expands its capabilities to accelerate its ESG agenda.​