Amman, Jan. 21 (Petra) – The Union of Arab Banks (UAB), in collaboration with the Association of Banks in Jordan (ABJ), inaugurated on Tuesday the strategic forum titled "Enhancing the Adoption of Environmental, Social, and Governance (ESG) Standards: Supporting Financial Actions for Sustainable Development." The event saw the participation of over 90 leaders from banks, financial institutions, and economic entities across the Arab and international spheres.

Sustainability as a Core Strategy
Mohammed Masoud, UAB Director of Forums and Conferences, emphasized that ESG standards enable financial institutions to integrate environmental and social responsibility into their strategies, ensuring sustainable growth and long-term value creation. He highlighted the rapidly changing global challenges in the realms of environment, economy, and society, noting the pivotal role banks and financial institutions play in directing capital toward responsible and sustainable investments, making them an integral part of the solution.

Masoud revealed that the economic and social costs of environmental crises currently exceed $160 billion annually. On the other hand, studies indicate that transitioning to more sustainable practices could generate up to $26 trillion in additional economic value by 2030. However, he noted that fewer than 45% of Arab financial institutions fully integrate ESG standards into their strategies, calling for a redesign of the financial sector’s vision to align economic returns with profound social and environmental impacts.

Insights from Central and Financial Authorities
Deputy Governor of the Central Bank of Jordan (CBJ), Ziad Ghanmah, discussed the national financial inclusion and green finance strategies launched by the CBJ. He underscored the growing momentum of ESG standards, noting the recent boom in sustainable investments, which aim not only for profit but also for societal transformation, increased clean energy use, and mitigation of climate change’s economic and financial impacts.

Similarly, Maher Mahrouq, ABJ Director General, stressed the importance of ESG standards while acknowledging challenges such as the lack of measurement tools and unified criteria, greenwashing, and the high costs of adopting these standards, particularly for long-term investments. He called for international efforts to standardize ESG guidelines, improve transparency, and foster public-private partnerships to encourage green economic transitions.

Towards a Sustainable Financial Future

Adel Bino, Chairman of the Jordan Securities Commission (JSC), urged financial institutions to embrace sustainable financing due to its profound social impact. He advocated for increased allocation of investment portfolios to green financial instruments, such as green bonds, to support renewable energy and climate-resilient infrastructure projects. This, he noted, would enhance transparency, mitigate risks, and attract investors, thereby contributing to a transition toward an environmentally friendly economy.

//Petra// AF

21/01/2025 21:46:56