DIBAF

Link: https://www.thenationalnews.com/business/economy/2023/10/04/difc-hailed-for-acting-as-growth-catalyst-for-global-sustainable-finance-market/

Date: 4th October 2023

Media: The National News

What happened?

The Dubai International Financial Centre is playing the role of a catalyst to boost sustainable finance globally, becoming a green funding center as the market for sustainable financing, emitting ESG Bonds (environment, social and governance bonds) and influencing neighboring regions to adopt sustainable finance practices. Green bonds are on the rise in Gulf Cooperation Council (GCC) countries, with companies in Dubai and Abu Dhabi issuing them for eco-friendly projects.

Whom and where it affects?

The DIFC role in sustainable finance affects primarily the Middle East region, particularly Dubai. Although, we could see a global effect in the sustainable finance market as investors grow an interest in looking for these types of projects.

What sort of public or private institutions are involved?

Among the public institutions, we have: DIFC (Dubai International Financial Centre), Nasdaq Dubai, Masdar (Abu Dhabi Future Energy Company), Abu Dhabi National Oil Company (ADNOC) or Taqa, Aldar Investment Properties, Commercial Bank of Dubai (CBD) and GCC (Gulf Cooperation Council) governments. 

Among the private institutions, we have: Abu Dhabi Commercial Bank, Majid Al Futtaim Holding, Aldar Investment Property and Aldar Investment Properties

Why is it important for Banking and Finance?

This situation is important for Banking and Finance because the global sustainable finance market, which was valued at $3.65 trillion in 2021, is projected to hit $22.48 trillion by 2031. This means that there will be about $19 trillion worth of projects that will need financing.

What do you think will be the consequences in the foreseeable future?

These developments are expected to contribute to a more sustainable and environmentally responsible financial landscape in the region and beyond. The consequences in the foreseeable future could be as follows:

1. Continued Growth in Sustainable Finance: The DIFC’s efforts to promote green and islamic bonds or sukuk, as well as its status as the largest ESG islamic bonds market, will likely lead to sustained growth in sustainable finance.

2. Increased Investment in Green Projects: With the rise of green and sustainable bonds and sukuk, there will likely be increased investment in environmentally friendly projects. This will contribute to the development and expansion of renewable energy, clean technology, and sustainable infrastructure.

3. Regional Influence: Dubai’s leadership in sustainable finance is likely to influence neighbouring countries in the Middle East to adopt similar practices.

4. Accelerated Transition to Renewable Energy: Sustainable financing will play a critical role in financing the adoption of renewable energy and related projects. State initiatives such as Dubai’s Clean Energy Strategy 2050 and the UAE’s Net Zero 2050 will likely accelerate the transition to renewable energy sources.

SDG: 7 Affordable and Clean Energy

Keywords: Sustainable Finance, Dubai International Financial Centre, ESG, GCC.

Link:

https://www.theguardian.com/business/2023/oct/03/sam-bankman-fried-ftx-crypto-trial-start

Date: THU, OCT 05 2023

Media: TheGuardian

• What happened?

Bankman-Fried, founder of the FTX cryptocurrency exchange, was charged with financial crimes. 

Through some reports, it came to light that FTX could not give customers their funds and forced the company to file for bankruptcy. In which the following month Bankman was arrested on conspiracy and fraud charges for diverting billions of dollars in investments, as well as money in risky operations and other illegal things.

He was also charged by the Manhattan attorney’s office, where he was responsible for using client funds to pay the bill for loan expenses at Alameda, as well as the purchase of high-priced real estate, and making extensive political donations.The FTX hedge fund was Alameda.

The Bankman-Fried financial downturn began in November 2022, in which it came to light that Alameda had billions in FTX-owned cryptocurrencies, and that it was also used as support for loans to FTT. When the CEO of FTX’s top competitor Finance said he was going to sell his $50 million in FTT. At that time all customers of both FTT and FTX took their money immediately, in which they feared they would see a total collapse throughout the industry. That’s when FTX went bankrupt.

• Whom and where it affects?

It mainly affects Sam Bankman who is the guy in charge for the fraud and all the customers of cryptocurrency that he had and that he made lose a lot of money. And this issue affects the area of cryptocurrencies making them lose a lot of value and also the banks that are working with such crypto coins. 

• What sort of public or private institutions are involved?

All the banks that work with the FTX crypto since they probably made a lot of people that invested in the coin  lose money, the lawyers buffet that are in court against Sam Bankman and also the company that Sam founded. 

• Why is it important for Banking and Finance?

Due to the collapse of FTX, many clients, lenders and investors lost millions of dollars, a possible burst of cryptocurrency bubble, hinting at the high level of volatility that cryptocurrencies can have. Therefore, many people, upon seeing this great drop, decided to transfer their funds from different types of cryptocurrency exchanges to banks or different entities that pose a lower risk.

• What do you think will be the consequences in the foreseeable future?

The consequences for Sam and its company are pretty clear, and they´ll be fraud and bankruptcy and probably a prison sentence for the accused; as for the banking activity, all the banks that worked with the crypto currency will have to rebuilt their financing since they lost a lot of money according to the crypto coin as well as the customers that had money invested on the FTX coin. As for the crypto world it could be seen as a warning of what could happen to them if they don’t do things right.

Keywords: FTX, Cryptocurrency Bubble, Sam Bankman, Exchange.

LINK:https://www.esgtoday.com/clarity-ai-launches-methodology-to-build-sfdr-aligned-indexes-and-etfs/

Date: 05th of October 2023

Media: ESGtoday

What happened?

Clarity AI, a sustainability technology platform, recently launched a methodology to aid index and ETF providers in creating and promoting products compliant with the European Union’s Sustainable Finance Disclosure Regulation (SFDR). Clarity AI employs machine learning and big data to offer environmental and social insights, analyzing a vast dataset encompassing companies, funds, countries, and local governments. Their Sustainable Index and ETF methodology help providers align with the EU’s Sustainable Investment definition, allowing assessment against sustainability criteria and regulatory thresholds related to UN Sustainable Development Goals, EU Taxonomy, and SFDR Principle Adverse Impact indicators.

Whom and where it affects?

Clarity AI’s Sustainable Index and ETF methodology affects:

• Index and ETF Providers
• Exchange-Traded Funds
• Financial Market Participants
• Companies and Organizations
• Regulatory Bodies
• Consumers and General Public

What sort of public or private institutions are involved?

The EU and UN are involved and in addition, Clarity AI uses machine learning and big data to deliver environmental and social insights to investors, organizations, consumers, and governments. As of September 2023, the Clarity AI platform analyzes 70,000 companies, 430,000 funds, 201 countries and 199 local governments.

Why is it important for Banking and Finance?

The Clarity AI platform and methodology are crucial tools for the banking and finance sector because they enable institutions to comply with regulations, meet investor demands, manage risks, gain a competitive edge, and align with global sustainability trends. These factors are critical in the ever-changing landscape of responsible management.

What do you think will be the consequences in the foreseeable future?

The consequences of the Clarity AI platform and methodology in the future are uncertain but can be expected to include:

• Enhanced compliance with sustainability regulations, reducing regulatory risks.
• Increased attraction of investors seeking sustainable investment options.
• Improved risk management by considering environmental, social, and governance (ESG) factors.
• Potential competitive advantages for institutions offering sustainable financial products.
• Opportunities for global expansion as sustainability becomes more widespread.
• Encouragement of innovation in financial products and services.
• Positive environmental and social impacts, such as reduced carbon emissions and improved social equality.

These outcomes depend on factors like regulatory changes, investor preferences, and institutions’ commitment to sustainability principles.

Keywords

Clarity AI, Sustainable Finance Disclosure Regulation (SFDR), Sustainable Development Goals (SDGs), Exchange Traded Funds (ETF), Big Data, Innovation.