Clifford Chance

Green Shoots: Sustainable Capital Markets in the Middle East

25 May 2021

The development of sustainable finance continues to evolve across the Middle East – a region more readily associated with conventional energy resources such as oil and gas.

Governments around the world continue to focus on climate policies and transition targets and the spotlight remains on green bonds and sustainable finance. Increasingly, however, the 'S' and 'G' facets of ESG (environmental, social and governance) finance are gaining momentum. The COVID-19 pandemic highlighted glaring disparities, such as income inequality, between populations and has precipitated a host of issuances with the proceeds earmarked for social purposes. In a report published in February 2021, Moody's anticipates global debt capital markets issuances of US$375 billion in green bonds, US$150 billion in social bonds and US$125 billion in sustainability bonds in 2021 – i.e., ESG issuances of approximately US$650 billion compared with US$491 billion in 2020.

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