Mashreq Bank provides $15.5 billion of sustainable finance and adaptation-related investments

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Joel Van Dusen, Group Head of Corporate & Investment Banking at Mashreq, said that since January 2021, Mashreq has facilitated $15.5 billion of sustainable finance and adaptation-related investments.

In a statement to Emirates News Agency (WAM), Dusen said that ESG is related to cash flow in five important ways. It minimises regulatory and legal intervention, increases employee productivity, optimises investment and capital expenditures, facilitates top-line growth by attracting customers through sustainable products and services, and reduces costs by, for example, lowering energy consumption.

He added that businesses and governments globally are increasingly recognising that Environmental, Social, and Governance (ESG) risks and opportunities are fundamental to guarantee the long-term success of companies alongside the attraction of talent, the operating model, and their investors’ interests.

As such, ESG principles have become a core element to every company’s operations and supply chain, moving from a “nice to have” to a crucial element of business strategy, Dusen stated.

He noted, “The levels of scrutiny on environmental credentials that businesses face will only continue to increase. Demonstrating genuine and tangible ESG policies as well as a solid strategy to offer more sustainable products and services has therefore become paramount.”

Dusen highlighted that businesses that neglect or do not put the right strategies in place to improve their environmental impact – including Scope 3 emissions and the environmental footprint across their supply chain – risk damaging their reputation, facing greenwashing claims and losing market share.

“A business’s ESG performance can also impact stock prices, business valuations, and investor appetite, in turn affecting a company’s potential growth and funding opportunities,” he stated.

Dusen added that an increasing number of jurisdictions, including the UAE, are passing regulations requiring businesses to adopt and report on ESG metrics, with some markets – such as the European Union – also introducing tariffs for non-compliant companies and products.

Similarly, the digital transformation and the digitisation of processes are enabling better reporting, efficiency gains, and data capture and analysis. Latest generation of digital technologies such as the Cloud, Artificial Intelligence (AI) and Machine Learning (ML), which are already part of the business digitisation toolkit, can make enormous inroads in optimising energy consumption and supply chain efficiencies.

ESG is related to cash flow in five important ways. It minimises regulatory and legal intervention, increases employee productivity, optimises investment and capital expenditures, facilitates top-line growth by attracting customers through sustainable products and services, and reduces costs by lowering energy consumption.

The financial sector has an important commitment to make in supporting ESG adoption across the supply chain by developing financial solutions that help businesses achieve their ESG objectives. Green bonds are an excellent example of this, but it can also be extended to ESG-linked supply chain finance programmes that reward suppliers who meet specified targets with a lower cost of working capital.