SCA Launches Its Capital Market Sustainability Plan at the Abu Dhabi Sustainable Finance Forum Following Discussion with Industry Actors

As part of the initiatives introduced by the Securities and Commodities Authority (SCA) to implement its recent list of priorities, H.E. Dr. Obaid Al Zaabi, CEO of SCA, announced SCA's capital market sustainability plan in his speech at the Abu Dhabi Sustainable Finance Forum held Wednesday by the Abu Dhabi Global Market. This announcement came after the draft plan was posted on SCA's website for discussion by industry actors.

Dr. Al Zaabi said that “this plan is part of SCA's role to regulate financial markets operating in the country, to create a favorable investment environment for capital users and providers, and to introduce initiatives aimed at stimulating markets, taking into consideration its responsibility—as a federal establishment—to support the national sustainability agenda and the sustainable development goals".

He explained that “the areas covered by the plan include: providing new effective methods to get the funding needed for sustainability projects; promoting corporate governance practices by incorporating sustainability into strategic decision-making; encouraging high-quality disclosures about sustainability-related matters; encouraging investors and their agents, such as investment managers, to become advocates of sustainable investment and providing them with the information, tools, and channels needed; and incorporating sustainability concepts into SCA's regulatory policies, whenever possible".

Dr. Al Zaabi indicated that SCA's vision for sustainable capital markets is centered on a proper financial and regulatory framework that informs the behavior of industry partners and relevant stakeholders, thus achieving the desired results and promoting green and sustainable investment. He added that this framework includes specific regulatory policies covering regulations, instruments, and regulatory mechanisms, adding that it will enable regulatory authorities to shift to sustainability-driven investment, limit risks, enhance market liquidity, and create an integrated market system that supports sustainable investment and finance".

He said that the country's commitment to sustainable development is at the heart of its vision and national development plan, adding that long-term growth requires strategies to preserve the environment, promote social welfare, and enhance corporate confidence through strong governance practices. Dr. Al Zaabi explained that from a financial market perspective, the ultimate goal of the plan is to foster long-term financial stability and economic growth".

SCA aims to have the plan fully implemented by mid-2020. The strategy detailed in this plan is the cornerstone of the shift to a national capital market that supports sustainability. Completion of this plan requires, among other actions, the combined effort of all relevant actors to make UAE-based capital markets among leading markets in this area.

The plan is centered on seven pillars, including rating and standard setting, legal and regulatory framework, market platform and investment instruments, corporate governance, transparency and disclosure, awareness and education, and awards and incentives.

The components of this plan are so closely related that the success of one depends on the success of all others. There are topics that are common between those seven pillars, including responsible investing, transparency and disclosure, awareness, effective governance, incentives, guiding standards and principles, innovation, engaging stakeholders, and cooperation.

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