Dubai is solidifying its position as a global hub for sustainable finance.A recent announcement by the Dubai Financial Services Authority (DFSA) revealed that Nasdaq Dubai,the city's international stock exchange,captured over 50% of the market share for US dollar-denominated sustainable sukuk issuances in the first quarter of 2024.
Sustainable sukuk,also known as Environmental,Social,and Governance (ESG) sukuk,are Islamic financial instruments that comply with Sharia law and specifically target projects with a positive environmental or social impact.The growing popularity of these instruments reflects a rising investor interest in aligning their portfolios with sustainability goals.
Ian Johnston,Chief Executive of the DFSA,emphasized the significance of Nasdaq Dubai's achievement at the closing ceremony of the Capital Markets Summit 2024 held in Dubai.He highlighted the crucial role sustainable finance plays in mobilizing significant private capital – estimated in the trillions of dollars – to achieve net-zero emissions targets.
Johnston also underscored the potential of the Dubai International Financial Centre (DIFC) to become a major player in facilitating this capital mobilization.The DIFC's robust infrastructure and sound regulatory framework,he argued,position it perfectly to attract and support sustainable finance initiatives.
Nasdaq Dubai's dominance in the sustainable sukuk market is attributed to several factors.The exchange has established itself as a preferred platform for sukuk listings in general,boasting a track record of successful issuances in recent years.Additionally,Nasdaq Dubai has implemented comprehensive ESG reporting guidelines,ensuring transparency and attracting investors seeking socially responsible investment opportunities.
This leadership in sustainable sukuk is expected to further enhance Dubai's reputation as a progressive and forward-thinking financial center.By providing a platform that caters to the growing demand for ESG-focused investments,Nasdaq Dubai positions itself to play a critical role in shaping the future of sustainable finance.