Amman, March 25 (Petra) -- Jordan's banking sector is increasingly focused on sustainability, with the integration of environmental, social, and governance (ESG) criteria now central to investment strategies and risk management, according to Wissam Fattouh, Secretary General of the Union of Arab Banks.

Fattouh emphasized that alongside climate risk considerations, these factors have become essential in shaping decisions across the country’s banking industry.

In an interview with the Jordan News Agency (Petra), Fattouh explained that the Union had recently organized a forum titled "Promoting the Adoption of Environmental, Social, and Governance Standards: Supporting Financial Measures for Sustainable Development" in Amman. The forum’s goal was to raise awareness about the role of ESG standards in enhancing the performance of Jordanian banks and attracting international investors.

The event also provided insights on how to effectively incorporate ESG frameworks and climate risks into investment and financial decision-making.

The Union has introduced a service to support the adoption and implementation of ESG standards across various sectors, not limited to banks. This service involves an initial assessment of institutions’ ESG adherence and identifying any gaps, followed by the development of tailored strategic plans to improve their implementation.

Fattouh noted that the Union of Arab Banks has become a leader in assisting banks and other entities in applying ESG standards, highlighting the significant financial and non-financial benefits that such practices bring.

Additionally, the Union continues to host workshops and conferences to further promote the integration of ESG criteria within banking strategies. These events are designed to improve banks' reputations, ensure long-term sustainability, and meet global investor expectations.

Concerning international Islamic finance, Fattouh discussed the growing opportunities for Jordanian banks in this sector, given the increasing global and local demand for Sharia-compliant financial products. He pointed out that Jordanian banks can benefit from this trend by developing innovative products, such as Islamic bonds (sukuk), to finance large-scale infrastructure and energy projects.

Fattouh also highlighted the potential for Jordanian banks to strengthen partnerships with international Islamic financial institutions, thereby expanding their networks of clients and investors. Financial technology was mentioned as another avenue for expanding the reach of Jordanian banks to global markets.

Investing in capacity building, such as training staff to innovate Islamic products and ensure compliance with international standards, will further enhance the competitiveness of Jordan’s banking sector, Fattouh added.
Recently, "The Banker" magazine recognized two Jordanian banks among the world’s top institutions offering Islamic financial services: "Jordan Islamic Bank" (ranked 42nd globally) and "Bank al Etihad" (ranked 60th globally).

Fattouh also emphasized the importance of financial inclusion in supporting both economic and social development in Jordan. By enabling access to financing for individuals and small businesses, financial inclusion stimulates economic growth and productivity. It also plays a critical role in reducing poverty and inequality, offering tools for responsible saving, borrowing, and insurance to improve living standards.

Moreover, financial inclusion fosters economic stability by integrating informal economic activities into the formal economy. It supports the empowerment of women and youth by providing equal opportunities for entrepreneurship, contributing to sustainable development goals, and enhancing the quality of education and healthcare.

The Union of Arab Banks has been instrumental in supporting Jordan’s efforts to expand financial inclusion, offering training programs and workshops to strengthen the capabilities of the country’s banking sector. The Union has also focused on creating innovative financial products to serve underserved populations, including women, youth, and rural residents.

Fattouh affirmed the Union’s commitment to collaborating with Jordanian regulatory bodies to improve policies that foster financial inclusion, enhance financial infrastructure, and broaden access to banking services through financial technology. In addition, the Union is working to strengthen partnerships between Jordanian banks and international financial institutions to offer affordable financing options for small and medium-sized enterprises (SMEs), which are essential to advancing financial inclusion.

//Petra// RZ

25/03/2025 10:16:07