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UAE retail investors could invest $40 billion to combat climate change by 2030, report says

Climate investments could reach $3.4 trillion in growth markets across Asia, Africa, and the Middle East

UAE retail investors could invest $40 billion to combat climate change by 2030, report says
[Source photo: Anvita Gupta/Fast Company Middle East]

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With a convergence of investor interest, robust forecasts, and a steadfast dedication to environmental responsibility, a recent study by Standard Chartered shows that retail investors in the UAE are poised to mobilize $40 billion toward climate investments by 2030.

The Sustainable Banking Report 2023 also highlights a global climate investing jackpot of $3.4 trillion, driven by the interest of investors eyeing growth markets across Asia, Africa, and the Middle East.

Diving into the specifics of climate investment in the UAE, the report forecasts a dynamic landscape – $23 billion is poised to surge into mitigation efforts, with energy storage, energy efficiency, and renewables emerging as the primary magnets for capital. 

Meanwhile, an additional $17 billion is earmarked for adaptation strategies, encompassing resilient infrastructure, food systems, and the burgeoning blue economy.

Rola Abu Manneh, Chief Executive Officer of Standard Chartered, UAE, said: “As the host of the Conference of the Parties on Climate Change (COP28) and the first country in the Middle East to pledge to achieve Net Zero by 2050, the UAE can lead the region in combating climate change, especially since it is characterized by a favorable regulatory environment that helps in the growth of businesses and economic sectors.”

The study also unveils that 93% of UAE investors are interested in climate investing, with 87% actively seeking ways to bolster capital flows. 

Despite this enthusiasm, a series of barriers unique to different investor segments impede the translation of interest into actual investments, including accessibility, comprehensibility, comparability, skepticism, and perceived higher risks.

The remedy, the report contends, lies in a collaborative effort among financial institutions, regulators, companies, and individuals to cultivate a diverse range of climate assets, thereby encouraging greater retail participation.

The report underscores the imperative for asset managers and banks to spearhead innovation in crafting new climate assets that align with evolving investor preferences. Notably, the burgeoning interest in biodiversity and the blue economy exemplifies the dynamic landscape that financial entities must navigate to propel climate investments into a new era of growth.

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