Green Bonds and Sukuks: UAE's Commitment to Sustainability !
The ESCA has issued a new resolution (Resolution No. 21 RM of 2023), introducing a new types of bonds and sukuks that may be issue by companies and businesses for public subscription.
All companies and businesses concerned and interested in adopting and developing policies that are environment friendly (ESG & sustainability), can now issue two new types of Bonds/Sukuks for subscription:
1. Green Bonds/Sukuks. (allocated towards green projects such as: climate change projects, pollution prevention projects, energy efficiency projects, and others)
2. Bonds/Sukuks related to "Sustainability" for subscription,
The revenues from such subscriptions will be allocated towards Green & Sustainability Projects.
The resolution, currently in force, further outlines the requirements and effects of considering certain bonds/sukuks as "green bonds/sukuks", as well as the obligation levied on the issuer to verify and comply with international standards such as the Principles of the International Capital Market Association (ICMA).
The new resolution will allow businesses and companies to allocate more budgets to implement their ESG policies as a result of the revenues collected from subscriptions.