The Banking Executive Magazine - March 2023 Issue

Joel Van Dusen, Group Head of Cor- porate & Investment Banking at Mashreq, said that since January 2021, Mashreq has facilitated $15.5 billion of sustainable finance and adaptation-related investments. In a statement to Emirates News Agency (WAM), Dusen said that ESG is related to cash flow in five impor- tant ways. It minimises regulatory and legal intervention, increases em- ployee productivity, optimises invest- ment and capital expenditures, facilitates top-line growth by attract- ing customers through sustainable products and services, and reduces costs by, for example, lowering en- ergy consumption. He added that businesses and gov- ernments globally are increasingly recognising that Environmental, So- cial, and Governance (ESG) risks and opportunities are fundamental to guarantee the long-term success of companies alongside the attraction of talent, the operating model, and their investors’ interests. As such, ESG principles have be- come a core element to every com- pany’s operations and supply chain, moving from a “nice to have” to a crucial element of business strategy, Dusen stated. He noted, “The levels of scrutiny on environmental credentials that busi- nesses face will only continue to in- crease. Demonstrating genuine and tangible ESG policies as well as a solid strategy to offer more sustain- able products and services has there- fore become paramount." Dusen highlighted that businesses that neglect or do not put the right strategies in place to improve their environmental impact – including Scope 3 emissions and the environ- mental footprint across their supply chain - risk damaging their reputa- tion, facing greenwashing claims and losing market share. “A business’s ESG performance can also impact stock prices, business valuations, and investor appetite, in turn affecting a company’s potential growth and funding opportunities,” he stated. Dusen added that an increasing number of jurisdictions, including the UAE, are passing regulations re- quiring businesses to adopt and re- port on ESG metrics, with some markets – such as the European Union - also introducing tariffs for non-compliant companies and prod- ucts. Similarly, the digital transformation and the digitisation of processes are enabling better reporting, efficiency gains, and data capture and analysis. Latest generation of digital technolo- gies such as the Cloud, Artificial In- telligence (AI) and Machine Learning (ML), which are already part of the business digitisation toolkit, can make enormous inroads in optimis- ing energy consumption and supply chain efficiencies. The financial sector has an important commitment to make in supporting ESG adoption across the supply chain by developing financial solu- tions that help businesses achieve their ESG objectives. Green bonds are an excellent example of this, but it can also be extended to ESG-linked supply chain finance programmes that reward suppliers who meet specified targets with a lower cost of working capital. Mashreq Bank PROVIDES $15.5BLN OF SUSTAINABLE FINANCE AND ADAPTATION-RELATED INVESTMENTS ISSUE 171 MARCH 2023 the BANKING EXECUTIVE 29