The UAE-based investment firm, Abu Dhabi Investment Office (ADIO) has launched a new policy to enhance the environmental, social, and governance (ESG) benefits of its incentives and public-private partnership programs (PPP).
The new policy will outline how ADIO incorporates ESG standards into investments and decisions on the various projects and businesses which are supported by the organization’s programs, to foster sustainable growth in the emirate.
The ESG policy calls on international standards like the UN Sustainable Development Goals Equator Principles, Paris Agreement and Task Force on Climate-related Financial Disclosures (TCFD) to focus on six key ESG objectives including environmental risk management and sustainability, Emiratisation, worker and public safety, social development, business integrity and human rights.
“The integration of ESG standards and values into business and investment decisions helps to improve company performance, reduce risk and drive growth. By formally integrating ESG principles into ADIO’s decision and investment process, we aim to further support the development of Abu Dhabi’s private sector.”
The pandemic has turned to be a wake-up call for many shareholders to understand the significance of ESG factors. Last year, Europe saw 505 new ESG funds which are more than double the number in 2019, according to the American financial service firm, Morningstar.
The ESG policy will apply to ADIO’s partners under its Innovation Programme and PPP transactions. The policy also targets to create opportunities for dialogue and new pathways for businesses and entities across Abu Dhabi to engage on ESG topics, according to the organization’s statement.
The government body tasked with overseeing foreign direct investment (FDI) and private sector development in the emirate will support companies that are following the sustainability principles in their management and operations, and will promote discussions with those that have not yet incorporated ESG standards.
Last year, ADIO created a public-private sector working group to consider ESG challenges and develop guidelines for Abu Dhabi businesses to partner in key ESG initiatives. The working group comprised the Abu Dhabi Department of Economic Development (ADDED) and other companies in the emirate.