- A white paper from the London Institute of Banking & Finance MENA explores how the current rise in ‘environmental, social, and governance’ (ESG) awareness in the Middle East has caused a major shift in the region’s financial services landscape.
The London Institute of Banking & Finance MENA (LIBF MENA) – a globally recognized organization that provides advanced financial education to banks and other organizations in MENA – today released a white paper on the topic. How FinTech can help firms measure ESG exposure.
There are several dimensions to this particular challenge. First, supply chains are large and complex. Globally, the average ‘original equipment manufacturer’ (OEM) has around 50,000 suppliers, many of which are small and medium-sized businesses with limited data collection capabilities.
Second, ESG disclosure regulations are being strengthened, in line with the requirements of the Task Force on Climate-Related Financial Disclosures (TCFD). For businesses, the potential costs of non-compliance are mounting.
However, companies will be hard pressed to meet ESG reporting standards. According to McKinsey consultants, carbon accounting systems are now similar to cost accounting systems of 40 years ago. There is a lack of widely accepted standards and software programs that can generate the required reports.
Technology will provide the answers. Geo-analytic company, Kayrros, for example, uses satellites, artificial intelligence (AI) and machine learning (ML) to provide its clients with data on environmental issues. Bigtech firms like Salesforce can also have an important role to play.
This white paper examines how the current rise in environmental, social, and governance (ESG) standards in the Middle East has caused significant change in the financial services industry. The region is witnessing an increase in sustainable finance from the private and public sectors. Decision makers in both are increasingly incorporating ESG considerations.
Given that the upcoming UN Climate Summits (COP 27 and 28) will be hosted in the MENA region, the region is expected to take an even bigger step towards ESG-led practices.
“There are great business opportunities in the Middle East for companies that move quickly to align ESG priorities with the broader vision of their governments,” said Kareem Refaay, Managing Director, London Institute of Banking & Finance MENA.
“Companies and organizations in the region are adopting ESG not driven by the goal of obtaining energy and cost savings, but the belief that embedding an ESG strategy will create value, including, but not limited to, environmental sustainability, employees. well-being and engagement, and broader social well-being,” he added.
Read the LIBF MENA white paper: How technology can be incorporated into ESG practices and programs: mena.libf.ac.uk/2022/10/31/whitepaper/
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LIBF is an internationally recognized organization that provides outstanding financial education to banks and other organizations in MENA.
Insight Discovery in the UAE has been retained by LIBF MENA to manage its strategic communications in the Middle East.
The London Institute of Banking & Finance exists to advance banking and finance by providing outstanding education and thinking, relevant to the needs of business, individuals and society. Founded in the City of London in 1879, for over 140 years, the London Institute of Banking & Finance remains the only banking and finance body with the power to award degrees.
LIBF MENA provides a range of solutions to meet the education and training needs of the banking and finance sector in the Gulf Council, as well as the Middle East and North Africa region.
Its programs have helped thousands of people develop their skills and advance in their careers, transforming businesses – and benefiting communities – across the region.