The Arab Petroleum Investments Corporation (Apicorp) aims to invest $1 billion in green energy projects as part of its new environmental, social, and governance policy (ESG), which targets to promote sustainable investments.
The multilateral development bank formed under the agreement signed by the ten Member states of the Organization of Arab Petroleum Exporting Countries (OAPEC), will evaluate the ESG footprint of all of its holdings by the end of 2023.
The Dammam bank’s overall investment portfolio accounts for $1.14 billion of which 13 percent that is the green assets currently account for $500 million in loans and direct investments.
Multilateral investment banks around the world are keen to remove the weightage of polluting fuels like coal from their portfolios as a commitment to sustainable renewables. Banks are also dumping polluting assets and transitioning to those with cleaner footprints due to a rising commitment to ESG principles among stakeholders.
Abed Al Saadoun Chairman – Apicorp
“We want to support a transition to a low-carbon, climate-resilient economy by mitigating risks across our operations, supply chain and client transactions by embedding sustainable principles in our business practices. We embark on this journey with the reassurance that all of our member countries are signatories to the 2015 Paris Agreement and participants at Cop26 to be held in Glasgow later this year.”
Higher ESG compliance among banks comes as investors become more ecologically conscious after the COVID-19 pandemic caused a reduction in emissions.
International Monetary Fund (IMF) has been urging developed countries to invest $100 billion on an annual basis to help bridge the gap for emerging economies on climate finance.
Apicorp has released an ESG toolkit to measure and classify the portfolio companies as high, medium and low risk. According to its report, the high-risk category includes those entities which need quick ESG solutions, medium risks companies that are halfway to their ESG commitments and the low-risk entities which typically involve activities with minimal or no adverse ESG impacts.
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