CSO Insights: How climate adaptation is hitting the mainstream for Midde East banks

Lindsey Hall I'm Lindsey Hall.

And I'm Esther Wheeldon.

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Welcome to All Things Sustainable, a podcast from SP Global. As your hosts, we'll dive into all the sustainability topics that are reshaping the business world.

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Join us every Friday for in depth analysis and interviews with leaders from around the globe. Together, we'll break down big sustainability headlines and cut through the jargon.

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On this podcast. One of our goals is to talk to all different stakeholders across the sustainability value chain, and that means hearing from all industries and all around the world. That's part of why we call this show All Things Sustainable, because solutions to big sustainability challenges require action from all sectors and all stakeholders. Today we're turning our attention to the Middle east in an interview with Vijay Bains. Vijay is Chief Sustainability Officer and Group Head of Environmental, Social and Governance at Emirates mbd. This is one of the largest banks in the Middle east and in Dubai, where it's based in the United Arab Emirates.

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Today's episode is the latest in a recurring series of this podcast that we're calling CSO Insights. In the CSO Insights series, we're talking to Chief Sustainability Officers around the world and across industries about how they're navigating the evolving sustainability landscape. The sustainability space has been through an extraordinary transformation in recent years, and CSOs have a front row seat to this evolution. We'll include a link in our show notes if you'd like to listen to other episodes in the series.

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We focused on the Middle east quite a bit when the UN hosted its annual Climate Change Conference of the Parties in Dubai in 2023. The last time Vijay was on this podcast, he explained how COP28 acted as a lightning bolt to bring global attention to sustainability in the region. And as you'll hear today, that attention has continued with events like Abu Dhabi Sustainability Week and Dubai Sustainability Week growing in the uae. He says the region is quote, doubling down on sustainability as an economic growth driver.

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Vijay also mentions his work with the UAE Banks Federation, including that this group set a target for the UAE banking sector to mobilize Dh1 trillion in sustainable finance by 2030. A dirham is the UAE currency and in current exchange rates, Dh1 trillion UAE is equivalent to roughly US$272 billion. A quick note, on some of the other terms you'll hear about, Vijay mentions icma. That's the International Capital Market Association, a member organization that supports development of sustainable finance in the bond markets and wider debt capital markets. He mentions the GCC or the Gulf Cooperation Council this is a political and economic alliance of Middle Eastern countries, including the UAE. And another term is SMEs. The those are small and medium sized enterprises.

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Vijay also talks about the growing focus on water in the region. For example, the UN will hold a high level water conference in the UAE in December 2026, which the UAE will co host with Senegal. This water focus is also showing up in sustainable finance trends. Vijay talks about how the bank recently completed an inaugural blue green bond for US$1 billion. And he explains how banks in the Middle east are thinking about physical risks of climate change tied to water stress and other climate hazards. Okay, here's our conversation where Vijay starts off by describing the Bank's approach to sustainability.

2:52

I think our first goal is around sustainable finance. So we set a target of $30 billion for sustainable financing and that's from our balance sheet by 2030. That set up at COP28 that was obviously held here in Dubai. We're really accelerating against that target and we've seen continued growth in our balance sheet towards and aligned to the Stable Development Goals as well as the ICMA principles for sustainable finance. And my job and really what the bank is trying to do is to green our book and to make sure it's as aligned as possible to those Sustainable development goals and also to integrate impact metrics in as well. The second area then is risk management to make sure that we are working with our clients as well to mitigate and reduce the impact on the environment, but also integrate social measures as well. And then the third part of my role is integrating sustainability within the bank. And what that means is if we're talking to a client around net zero, what we actually do ourselves. Often clients rightly say to say, are you actually doing net zero yourself as a bank? Are you operationally reducing your own emissions? Because it is quite tricky Talking about scopes 1, 2 and 3 and reducing your emissions. We also have our kind of operations desk and our strategy desk that looks at our internal targets. So for example, within the group we have a gender target for our senior leadership of 25% of all our senior roles will be filled by females by 2027. We're really proud at the moment that our gender pay gap is females are paid more than males, which will be quite surprising. It's definitely an achievement as well for not just a GCC bank, but a global bank as well of our scale. And finally the big area as well is upskilling. There's so much knowledge in sustainability as well. There's so much to learn about different technologies, different industries. So a large part of my role is spent on capacity building and creation as well.

3:25

As you mentioned COP28, which took place in Dubai a couple years ago, and it's also been a couple years since you and I last spoke during Climate Week NYC in 2024. And I'd love to know just how has your role changed since then and how have sustainability discussions more broadly evolved in the Middle east, would you say?

5:14

I think there's now more outreach and working with government entities. And we're coming off the back of a huge Abu Dhabi Sustainability Week held in Abu Dhabi where we have more international entities, NGO', CEOs companies coming in. And for me now it's working with government entities on the growth of sustainable finance. And the UE Banking Federation is represented by the UE banks as well as a number of international banks including hsbc, Standard Charlie and Barclays. And what we typically look at is working in partnership with government entities within the UEE as well as the central bank on lots of different regulations from cybersecurity to legal and compliance as well. Then the committee I chair is for sustainable finance. So we're made up of banks that are committed to the Dh1 trillion target which we're going to hit by 2030. The velocity is really rapid. The second area we look at is sharing knowledge in a really open forum. I think in sustainability, the great thing about the industry, Lindsay, as you know, is openness and sharing knowledge as well. So actually what we do is we share compliance knowledge, we share risk management tools, we talk about physical risk, we talk about transitional risk, we talk about some of the challenges and also some of the challenges that our customers face as well. Accessing finance. So that committee has been really, really effective. 1. Growing sustainable finance. 2. Standardizing the way in which we talk about it. So almost all the banks now have sustainable finance frameworks and almost all the banks are now issuing bonds on behalf of their clients as well as themselves. So it's been a really great kind of convening power. And I think it's really important that within our roles we're not competing with the banks. Our interest is to grow the market and support customers on the journey as well. I think that's a really important kind of distinction and growth area we've had. I think the capacity building now has changed. So staff awareness is really high. And I'm really fortunate to join a bank that sustainability is taken so seriously from every employee, from our board and our CEO through to every member of staff as well. We're doing more advocacy work and NGO outreach as well to partner and kind of work at Impact Finance. And we're coming off the back of now integrating sustainable finance into our funding and our wholesale funding as well. So we just executed a really great blue green bond, the largest ever issued by financial institutions in the world. And that really links together our front office banking teams, our risk management teams through to then our funding desk as well as investment banking team. So I think what's happened now is they've been able to work within the bank to integrate different functions in sustainability.

5:35

Let me dig in a little bit on that blue green bond for anyone in our audience who's not familiar with that term. What should they know about it?

8:08

Yeah, so a blue bond, a kind of usoposis, is used for blue projects, whether it's environment or habitat protection in the sea or kind of prevention of pollution in the sea or renewable energy generation as well. What's happened then since December is that those blue guidelines have expanded to include fresh water as well. So actually we found ourselves with quite a healthy pipeline of projects. So we set a 300 million target. And when you think about Dubai, you think about the Middle east and you close your eyes. Yes, you think about skyscrapers. Yes. You think about that great life, but you also think it's quite a dry environment. So it's quite topical for us. Some of our projects involve desalination, involve wastewater management as well as biodiversity protection. And the habitat, although not as diverse as many around the world, needs a lot of protection and needs a lot of support by combining it with a green bond, which is for us a lot of renewable energy projects. Again, when you close your eyes, you think about Dubai, you think about the sunshine. We're quite blessed with sunshine as well. Year round green buildings as well. By combining them together, we're able to hit a really big ticket. Billion dollars. The UE is also hosting UN Ocean Conference in December. So we're going to see a lot more blue finance and it's a really material topic due to the water stress within the region as well.

8:15

Talk to me a little more about that water stress. How are you as a bank thinking about the risk associated with water stress?

9:29

Yeah, so we look at one of two ways. One is our own internal usage of water. So trying to reduce that and trying to look at water consumption as well and trying to educate and it's really simple measures. Like we're using a lot of plastic water bottles, so actually we've gone to glass. We've now given all Staff their own water bottles and we've done a lot of education mechanisms. Secondly then measuring our own water consumption and about 60% actually comes from our data center. So we're now working with our data center supplier to try and reduce and change our energy usage because that then reduces our need for cooling as well. Now on the other side we do look at a water impact that we're financing. So actually we're now working and talking to our clients and our very large clients around environmental protection, around desalination, around brine management and also per capita water consumption. So one of the big areas of water consumption is actually energy generation. So we're always encouraging our clients one to reduce energy. That also has a brilliant lead in for us to reduce emissions as well. So it's a win win for us.

9:36

Vijay has just touched on some of the key sustainability trends we're watching at S and P Global in 2026. One, the rapid expansion of AI driven data centers will put pressure on energy supply, supply, emissions and water availability. And this focus on water extends beyond just data centers of course. As climate change intensifies, drought, flooding and water stress are projected to increase in many regions. Research from our team at S and P Global finds that the world's largest companies could see the total annual cost of climate physical risk reach $1.2 trillion by 2050. Water stress is projected to be the second largest contributor to those costs. I asked Vijay whether his bank is measuring climate hazards like water stress. Here's his response.

10:38

Yeah, most definitely. And we do our physical stress tests and in the region heat, yes, is an issue, heat stress is an issue, but actually water and unpredictable precipitation has been a challenge. 18 months ago we did have the storms that happened in Dubai and the Dubai Abu Dhabi and many of the other emirates as well have already put together climate adaptation plans around excess rainfall. And with climate change occurring, it's now predicted that the region will yes, become warmer, but also to become wetter. That can be quite a challenge from a physical hazard point of view because we've got flood roads, isolated communities, but also damage, as you said, infrastructure. So we started that mapping out and we're working with many of the UE entities to share some of that knowledge. Actually we're also financing storm drainage and other projects in some of our countries operations. So it's really great to be part of that kind of circular loop to talk around adaptation but also finance and see the results coming off that as well.

11:20

And that kind of infrastructure project you mentioned, would that fall into the bucket of Adaptation. And part of why I ask is because I'm just hearing more and more discussion of adaptation in the face of inevitable climate risks.

12:20

Yes, for us it definitely falls into the bucket of adaptation. I think you're right. I think adaptation for us is now hitting the mainstream. I think our clients really understand the need for adaptation and adaptation financing as well.

12:32

Adaptation resilience was a buzzword that we heard a lot at Climate Week in 2025, more so even than in previous years. And I agree with you, it's becoming more mainstream. I think there's still opportunity to educate more on what do we mean when we talk about adaptation. What does that look like in practice? Do you have any examples in terms of adaptation related projects that you financed?

12:45

Yeah. So for us, we are financing the storm drainage systems and a few different urban centers which don't have regular precipitation. We've also financed seawall protections and we've worked with regulators there on. When you think about tides, yes, the sea level increase, but actually the king tides, so the high tidal flows will increase as well. And so we finance adaptation around coastal communities within the region and the wider region. And then also in climate adaptation is thinking about surge protection of certain fluvial flows as well as certain rivers. So that we're seeing now an increased pipeline of. And yet we see it definitely. Where I've lived as well, in London, you've seen the Thames Barrier. So more and more sovereigns are now thinking at a national level and sovereign level around the adaptation plans.

13:10

I'm really interested. I sit in the US where over the past year or more there's been this pushback at the federal level on climate. What should our listeners around the globe understand about the landscape for sustainability, where you're sitting and how that's been evolving?

13:57

I definitely think it's evolved and grown. It's really interesting when we talk about blue projects and water projects. I think people conceptually get water projects. So if you're not a sustainability expert, everyone understands water shortages, everyone understands sanitation, waste water management, pollution. We generally look at topics where it cuts through a lot of that technical knowledge and people can pick it up quite quickly. So sustainability in the region's evolved. Yes, definitely. We've seen a lot of growth in the last two years of sustainable finance. Issuances of debt, issuances. We've seen continued growth of frameworks as well. In the last two or so years, we've seen events grow up like Dubai Sustainability Week, Abu Dhabi Sustainability Week, which have helped propel growth. Finally, we've seen regulations Grow. So the UEE was The first of 10 countries to submit is NDC homework for COP30 in Brazil. And we're seeing across the region, the region really doubling down on sustainability as a growth driver. That's the big message that we hear in the region is that sustainability can lead to economic growth and will lead to economic growth as well. And then finally, I think it's the diversification. I think if we were talking two years ago in cop, renewable energy was definitely the focus. Now as I mentioned, it's air pollution, green buildings, wastewater management, blue assets circular economy now is really in focus as well as food security. So sustainability's evolved and also increased into new areas.

14:13

So can you talk to me a little more about these events that have been popping up in the region? What are some of your kind of key takeaways from? You mentioned Abu Dhabi Sustainability Week just wrapped up.

15:42

Yeah, I think my takeaway is it's really grown in scale, in size. So you see a lot of renewable energy developers from around the world come to the events and hosting their projects and showcasing their projects. We've seen also asset management and sovereign wealth funds within the region again push sustainability. I think for me the weeks and the events are becoming more international. Secondly, I think we're seeing public private partnerships. So within the region is setting up pathway of we want to generate xyz, we want to manufacture as well and we want to be able to export this technology around the world. And also we're open to business. I think that's the key in the region. Sustainability is a core part of now the UEE growth story and the Saudi growth story for 2030. I think finally it's part of the corporate mindset. So actually the number of CEOs, the number of board members, I mean I saw a whole load of motorcades in Abu Dhabi Sustainability Weeks. A number of ministers coming in to the country as well from not just region but around the world. It's really, really serious and actually very similar to New York Climbing Week and London Climbing Week. It's great to be around sustainability people. Lindsey, at the beginning of the year because it sets the tone in a really positive fashion. So I'd encourage you south and all your listeners to please be a guest next year in Abu Dhabi Sustainability Week. I can promise you it'll be great weather.

15:52

Great weather sounds very appealing. Where I am in the us still digging out from a huge snow and ice storm. I asked Vijay to tell me more about another event. He mentioned the UN's 2026 Water Conference. As our regular podcast listeners know, water is something we're increasingly hearing about at events like COP Climate Week and Davos, and we expect it will be a big area of focus for sustainability conversations throughout 2026. The UN held its first water conference in nearly half a century in 2023, and since then the UN has launched its inaugural System Wide Strategy for Water and Sanitation and the UN Secretary General appointed the first Special Envoy on water. A quick refresher on a couple terms we're hearing. Vijay just mentioned that the UAE submitted its NDC homework that refers to a nationally determined contribution or a country's plan for achieving the goals of the Paris Agreement on Climate change. And a note on a couple terms we're about to hear. In 2022, the UN hosted its biannual biodiversity focused Conference of the Parties, COP15 in Montreal. That gathering resulted in a landmark agreement for nature called the Global Biodiversity Framework, which Vijay refers to as the Kunming Montreal Protocol. Vijay also mentions one of my favorite wonky acronyms, nbsaps, and that stands for National Biodiversity Strategies and Action Plans. It refers to a country's plans to protect biodiversity. Okay, back to the interview where Vijay tells me more about the 2026 UN Water Conference.

17:13

So that's been co hosted by the UAE in Senegal in December. We've seen from kunming Montreal Protocol MBSAPs start to be drafted at a country level. So what we're expecting is more detail there, more protection of ocean habitats and more ring fencing and protection of offshore areas as well. So we believe this will be really large. We're expecting a steady drumbeat of best practice and hence why again, it's a really driving force behind our blue bond. So we're going to see more blue financing come to the table as well.

18:39

So on this topic of sustainable finance you had this great quote. The last time I interviewed you for this podcast you said I love sustainable finance and I also want to get rid of that term sustainable finance. And you had this great analogy of remember when we used to talk about E banking and digital banking and we don't do that anymore, we just talk about banking. That's really stuck with me. And you said you want to eventually see the same thing happen with sustainable finance. So let's check in. How has that progressed since we last spoke?

19:10

Yeah, I do think we're on the track for that goal, if I give you context, is that we have now mass trained all our relationship managers in sustainable finance. We've mass trained them in different sustainable industries, from hydrogen to different renewable Energies Wind. We've now trained them in different types of green buildings as well. So actually it's part of their BAU role, which is really great because actually what we found is people really engage and get really excited about sustainability. Everyone and you know, as much as anyone, Lindsey has an opinion on sustainability as well. From your family to your friends to someone you meet for a coffee. So yeah, we're probably halfway through that journey of mainstreaming sustainable finance and I think since we last spoke, yes, there's probably been a sea change in sustainability in banking as well. We've seen Net Zero banking lines fall away. But actually if I have a look at it, the net zero goals for most of the financial institutions are there. It's now mainstream. When I'm talking to board and executive committee where people will do a double click into, ah, Vijay, this is the finance submissions for this industry. So yeah, I do believe we're on that pathway. And I think actually many people say to me, Vijay, are there as many sustainability roles as before? And I'm a little bit worried about industry. And I said I'm really optimistic because again, it's being integrated into everyone's roles in the bank and within say, Emirates mbd. It's definitely one of the criteria we look for our leaders is that how much sustainability knowledge do they have? Are they thinking in a sustainable fashion as well? So I'm really pleased. I'm hoping we talk another two years. And some of these terms are de acronymized as well. I do believe it is mainstream pathways.

19:39

It's really interesting to hear you bring up the Net Zero Banking alliance and I love to ask CSOs when I get a chance to talk to them for this podcast, like, how are you thinking about the current state of sustainability in the world?

21:19

Yeah, so if I took an MSMBD level as well. We did not join the Net Zero Banking Alliance. That does not mean that we did not make finance emissions pathways. And actually, you know, if I have a look at our fossil fuel finance emissions, they're around 1%, 2% of our book, which is quite a significant achievement for a bank in the region. We're still sharing information in different forms with each other. I think also a lot of our finance emissions calculation works happened due to Net Zero Banking Alliance. So a lot of that knowledge has already been shared. But when I'd seen banks lead the alliance, actually I'm still seeing publications on pathways on portfolio missions and actually a lot of them followed it up with talk on sustainable finance and renewable energy growth and financing the transition as well. So actually I think the language has changed from a measurement risk management approach more to a financing growth approach which if I might say, I think feels more natural for bankers and financiers as well. Because actually what we're now seeing is quite keen and really great targets for sustainable finance and green finance. So I would say we've gone to a different juncture where some of the targets move from sustainability teams through to the front office teams, which is actually where you kind of need it as well.

21:32

And what should our audience understand about how your bank is working with clients in hard to abate sectors?

22:47

Yeah, certainly. So we definitely, as everyone has, we do have hard to abate sectors. We have a lot of construction in our books and we're trying to scale some of those technologies. We have steel on our books as well. So we're again engaging with our clients as well on how to build green steel, how to generate energy in a renewable fashion. Again with our real estate book as well. We've got helped a lot of our clients measure their emissions, understand the net zero pathway and a lot of their countries operation and start to think about different technologies and players that are available. We've also started to around green building standards and how those can be integrated in their portfolio. And then we've got aviation as well, which is a very tricky, hard to abate sector but really visible. So again with a gauge of a client's one, to show how we measure emissions, but two, also to understand from their side of things what's the direction of travel and what are the challenges they've got. So actually it's been a really good engagement of talking about our pathway and what we are looking to finance in the future. And two, being really open on some of the challenges that the industries face.

22:53

Today we heard how one of the largest banks in the Middle east is doubling down on sustainability. Vijay outlined Emirates MBD's sustainability goals, which run the gamut of environmental, social and governance topics.

23:55

Vijay also discussed how the broader banking sector is showing up in sustainability conversations through the work of the UAE Bank Federation and through events like the UN Water Conference the UAE is co hosting later this year. Vijay said he expects to see a lot more blue finance in the Middle east where water is a material topic. That's because of water stress in the region and it's also a result of unpredictable precipitation. For example, in April 2024 a storm system dumped more than a year's worth of rain on some UAE cities causing flash flooding, travel delays and deaths and.

24:07

Banks in the Middle east, as in other parts of the world, are responding with an increasing focus on adaptation of resilience Emirates. MBD is financing projects like storm drainage systems and seawall protections. And we'll continue to watch this trend in adaptation investment because, as Vijay said, adaptation is now hitting the mainstream.

24:40

Okay, Lindsay, how are you handling so much time with snow delays for school?

24:58

Well, my kids are playing a lot of chess because I had to ban video games because all they wanted to do all day, every day was play video games. So that's, I guess, a positive outcome. But I'm really ready to get out of the house. Thanks for tuning in to this episode of All Things Sustainable. If you like what you heard, please subscribe, share and leave us a review wherever you get your podcasts.

25:04

And a special thanks to our agency partner, the199. See you next time.

25:27

Sam.

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