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Despite $2tn into green finance, vast potential still untapped

October 22, 2025 / 10:06 PM
Despite $2tn into green finance, vast potential still untapped
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Sharjah 24: The world mobilised nearly USD 2 trillion in green finance in 2024, yet “there’s still an awful lot of finance which is not green,” observed Creon Butler, Director of the Global Economy & Finance Programme at Chatham House, during a Sharjah Investment Forum 2025 panel titled “Aligning Global Finance with Sustainability.”

Referencing the USD 30 billion pledged to the Global South at COP29 and an additional USD 300 million in international public finance, panellists agreed that clearer taxonomies, smarter de-risking, and greater policy alignment are essential to rebalance global capital flows.

Butler outlined three priority actions: transparency, prudential regulation, and public international finance. “Disclosure only works if it is simple, comparable and honest about transition,” he said. “Climate risk is growing in the system and not fully recognised; central banks and prudential authorities should treat it like any other material risk with capital requirements and limits. And while blended finance matters, plain public international finance, deployed catalytically, can crowd in private capital at scale.”

From West Africa’s perspective, Koffi Fabrice Djossou of the West African Development Bank pointed to the chronic shortage of financing that limits innovation. “Early-stage prototyping, testing and then scaling remain the biggest barriers,” he said. “Innovative instruments such as grants, venture capital, green and social bonds and partnerships for risk-taking are essential. Blended finance and public–private collaboration can turn prototypes into solutions.”

Representing a diversified multinational group, Ahmad Aboud, Group CFO of Ghassan Aboud Group, described ESG as both a funding advantage and a market discipline. “Green funding reduces our borrowing cost,” he said. “Stakeholders including employees, customers, suppliers, now ask what we are doing. When we banned plastic bags in our supermarkets in 2018, we earned loyalty as well as savings. And robust governance is non-negotiable as we scale and transition to second-generation leadership.”

Focusing on the financial system, Wolfgang Engel, General Manager & Chief Representative for the Middle East & Africa at the Institute of International Finance (IIF), emphasised the need for global coherence. “We’re working with regulators to harmonise standards, support ESG integration and climate-risk disclosure, and to build capacity,” he said. “Data and metrics must be comparable; transition-finance frameworks should help carbon-intensive sectors decarbonise responsibly. And we need to expand the agenda beyond climate to nature and biodiversity finance, with emerging-market inclusivity front and centre.”

From the energy sector, Youssef Salem, CFO of ADNOC Drilling, advocated for a pragmatic approach to ESG focused on relative improvement rather than blanket exclusions. “The UAE’s energy story is broader than oil, with gas underpinning data-centre growth and AI leadership,” he said. “ESG must remain investable; a narrow view produces underperforming funds and starves the transition of capital. The right question is: within each sector, who is improving fastest and by how much?”

As the discussion turned to unlocking sustainable capital in emerging markets, Salem argued for shared responsibility: “Developed markets acknowledge future emissions growth will come from emerging markets. If they want us to follow the same trajectory without the historic emissions, they must share the corrective burden. Use that logic to raise capital and lean into the USD 30 billion that’s already been signalled.”

Engel added that perceived risk must be addressed “head-on.” “Phase out harmful subsidies quickly, set detailed, credible NDCs, and provide stable, predictable regulation. Many emerging economies actually have more institutional flexibility to align monetary, prudential and industrial policy. Use it.”

Djossou proposed, “Embed ESG in investment decisions, reform institutions, deploy PPP de-risking, and scale digital-finance platforms to widen access. Tailor instruments to SDG-aligned projects—that’s how you crowd in capital.”

Calling for clarity and incentives, Aboud urged regulators and investors to work together. “Start with awareness: what ESG really means and how to implement it. Build platforms that translate effort into cheaper rates. And customise expectations by sector and market; a one-size manual won’t work.”

Engel concluded: “Lock in clear taxonomies, offer capital relief or guarantees for green and sustainability-linked instruments, standardise disclosure, and use regulatory sandboxes to pilot what works—then scale it.”

Organised by the Sharjah FDI Office (Invest in Sharjah), in partnership with the World Association of Investment Promotion Agencies (WAIPA), the two-day international forum, held for the first time in conjunction with the World Investment Conference (WIC), marks a major milestone for Sharjah in shaping the global discussion around sustainable investment and economic development. Under the theme “Transforming Our World: Investing for a Resilient and Sustainable Future,” the gathering is bringing together more than 10,000 participants from 142 countries, and features 130 speakers across more than 160 sessions and 120 bilateral meetings.

October 22, 2025 / 10:06 PM

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