Sustainability and Islamic Finance in the United Arab Emirates

The targets set by the UAE to prepare the country’s economy for a post-hydrocarbon era have been very ambitious. As part of its economic diversification actions, the UAE has undertaken to increase the clean energy contribution to the total energy mix from 0.2% in 2014, to 24% by 2021. In the UAE Energy Strategy 2050, a target is set of cutting carbon dioxide emissions by 70% by 2050 and increasing the use of clean energy to meet 50% of the country’s energy needs by the same year. The Dubai Clean Energy Strategy 2050 similarly sets out the emirate’s aim of transforming Dubai into a global clean energy centre. These goals will require considerable capital investment. However, while other centres for Islamic finance have seen a growing number of responsible finance sukuk issuances, there have been noticeably fewer issuances in the UAE. Mobilising private sector finance through responsible financing activities will be critical in helping the UAE government to meet its extensive sustainability targets.