The Gulf is going green, and the money is following. The MENA sustainable finance market just hit $35 billion, and the UAE has set a target of 1 trillion dirhams in sustainable finance by 2030. Joining me is Dr. Jelena Janjusevic, Deputy Global Head of Department at Heriot-Watt University in Dubai, and MFT member.
Jelena, thank you for coming and welcome. Let's start in plain terms — what does sustainability in finance actually mean?
In very simple terms, sustainable finance is about making financial and investment decisions that generate financial returns, obviously, but also consider long-term environmental, social, and governance risks and opportunities. It's important to understand that sustainable finance does not mean sacrificing profit for sustainability — it's rather recognizing that climate change, resource scarcity, regulatory changes, investor preferences, and consumer expectations are all influencing results. We cannot disregard it.
When people think about sustainability, they think about climate immediately. What are the three pillars when it comes to sustainability?
By definition, sustainability has three pillars: economic, environmental, and social. You're right that the first thing that comes to mind is usually protecting the planet, saving forests, recycling — at the beginning, the focus was much more on the environmental pillar. But more and more, the economic pillar is coming into play, and investor preferences are changing. Investors are looking to invest in assets categorized under ESG — environmental, social, and governance criteria are extremely important now.
Looking at Saudi Arabia, it's now the Gulf's biggest issuer of sustainable finance, with nearly $20 billion in 2025. What's driving that momentum?
Before that — one small but relevant point for this region. Sustainable finance here is a tool of strategic economic transition and transformation, not just an environmental agenda. The UAE and Saudi Arabia are leading that way. As you said, Saudi's sustainable finance is growing significantly, and there are three key drivers: government policy and strategy, investor demand, and economic transformation. If we want to point to one strategic document driving all of this, it's Vision 2030. Saudi Arabia is investing heavily in renewables, tourism, hydrogen, sustainable transportation, major infrastructure, and industrial diversification — and sustainable finance is helping raise the enormous capital needed for that.
The UAE is also targeting 1 trillion dirhams in sustainable finance by 2030. Is that target realistic and achievable in that timeline?
I think we've all learned that this government is able to set very ambitious targets — and also able to fulfill them. So I'd say it's ambitious but achievable. A few factors support that. First is the commitment coming from government, with strategic documents at the national level directly geared toward sustainability. Second is the financial sector — UAE banks have publicly committed to raising significant green capital. And third, both Dubai and Abu Dhabi have developed sophisticated financial markets that continue to attract strong attention from international investors.
Companies in the UAE now face mandatory emissions reporting for the first time. What does that actually change for businesses here?
This is more evidence of that government commitment — something that was largely voluntary is now becoming mandatory, which means it's becoming part of corporate governance and business strategy. For companies, that means first looking into accurate, reliable data and measurement systems that can track emissions and identify where they're coming from — operations, supply chains, and so on. Then they need to think about what actions to take to reduce those emissions and integrate climate risk into decision-making. At first, companies may see this as just a compliance measure, but over time they'll see it improve operational efficiency, climate risk modeling, and reporting — and ultimately their competitive advantage, especially for companies working with international investors and multinational supply chains. Two things matter here: investors want certainty, and sustainable finance provides that. And sustainability data is becoming just as important as financial data.
You spent 20 years working with the World Bank, IFC, and UNDP on macroeconomics. Do you think global institutions are ready for this?
I don't think the question is whether they're ready — they are ready. It's more about how they're supporting businesses and governments to actually implement what's in these multilateral agreements and sustainable development goals. They've made a big contribution, especially in recognizing sustainable finance as a development issue, but I'd argue implementation still needs to accelerate. I've spent over a decade working on sustainability projects across multiple countries with international organizations, and where they really help is reducing investment risk — which in turn helps attract private capital. That matters because achieving sustainable development goals comes down to a financing gap. Public finance alone isn't enough — we need committed institutions, regulatory certainty, skills, and ready projects to bridge that gap, alongside private finance.
A lot of people, when they think about sustainability and finance, wonder: is it actually going to make me money or not?
Absolutely — there's more and more evidence and research showing that returns on sustainable investment match, and sometimes even exceed, traditional returns. What's important is that it reduces risk. We've seen the floods in the UAE, and insurance companies know exactly how much that costs — not just them, but businesses and households too. Sustainable investment helps diversify portfolios, reduce risk and cost, and create long-term returns. More investors are looking to invest in sustainability that generates real commercial value, not just environmental impact. So yes, it absolutely goes together.
So, long-term profit and long-term return.
Absolutely.
Well, thank you so much.
And thank you for initiating these important topics.
