[World Corporate Law News] UAE Sustainable Finance Group Issues Fourth Statement

[2025] 181 taxmann.com 958 (Article)

World Corporate Law News provides a weekly snapshot of corporate law developments from around the globe. Here’s a glimpse of the key corporate law update this week.

1. Securities Law

1.1 UAE Sustainable Finance Working Group publishes Fourth Statement during Abu Dhabi Finance Week 2025

On December 19, 2025, the UAE Sustainable Finance Working Group issued its fourth statement, reaffirming the nation’s strong commitment to advancing sustainable finance in alignment with existing initiatives. This includes the UAE Green Agenda 2015–2030, the National Climate Change Plan 2017–2050, and the UAE Net Zero by 2050 Strategic Initiative.

The release of the fourth statement reflects the UAE’s proactive approach to sustainable development, complementing the significant steps it has taken to implement the Climate Change Law and develop plans to reduce greenhouse gas emissions. Since the issuance of the third statement, the Working Group has taken actual actions to strengthen and operationalize efforts across its workstreams. The Working Group comprises national financial regulators, ministries, and financial markets, and is coordinated by the Financial Services Regulatory Authority of ADGM.
The fourth statement outlines progress across the Working Group’s core workstreams:

Workstream 1: Sustainability-Driven Corporate Governance:

The “Principles for Effective Management of Climate-Related Financial Risks,” issued in November 2023, provide a comprehensive approach for integrating climate risks into business strategies and risk management frameworks within financial institutions.

Workstream 2: Sustainability-Related Disclosures:

The “Sustainability Disclosure Principles for Reporting Entities,” launched in 2024, aim to enhance transparency and consistency in ESG reporting at both entity and product levels. These principles define material aspects related to scope, timelines, and disclosure obligations, aligning local practices with global standards, including those of the International Sustainability Standards Board (ISSB).

Workstream 3: UAE Sustainable Finance Taxonomy:

The Working Group continues to evaluate the strategic design of a taxonomy tailored to the UAE market needs, ensuring interoperability at the international level. In 2023, the Working Group issued the “Summary of General Principles for the UAE Sustainable Finance Taxonomy,” guiding development efforts with a colour-coded (traffic light) system and minimum social safeguards.

Workstream 4: Climate Transition Planning:

The newly issued “Climate Transition Planning Principles,” based on the 2025 consultation paper, provide a structured framework for UAE financial institutions and corporates to prepare, govern, and disclose credible information on their climate transition strategies. These principles emphasise integrating transition planning into governance frameworks, scenario analysis, and risk management.

The transition principles aim to direct financial flows toward activities aligned with the UAE’s climate objectives, in line with global best practices. These underscore the critical role of boards and senior management in ensuring accountability for climate transition planning and integrating climate considerations into overall business strategy and long-term financing plans.

The principles also highlight the importance of data collection, indicators, and scenario analysis by financial institutions to ensure alignment between transition plans and climate goals. The Working Group may introduce sector-specific regulatory requirements while maintaining resilience to adapt to evolving international standards. These principles establish a national reference framework for embedding climate and sustainability considerations across financial services, corporates, and markets.

H.E. Ahmed Jasim Al Zaabi, Chairman of Abu Dhabi Department of Economic Development (ADDED) and ADGM, stated:

“The fourth statement of the UAE Sustainable Finance Working Group marks a clear shift from ambition to execution, reaffirming the UAE’s unwavering leadership in sustainable finance. Through robust regulatory frameworks, effective collaboration, and continuous market engagement, the UAE is translating national climate objectives into a financial ecosystem aligned with its climate commitments and long-term economic vision. As the fastest-growing international financial centre, ADGM is proud to lead these efforts, strengthening investor confidence and positioning the UAE as a global reference point for sustainable and transition finance.”

Source : Official Announcement