Mashreq, a leading MENA financial institution, is partnering with UAE-based fintech firm Fils to launch a carbon offsetting service for corporate clients. Under the signed Memorandum of Understanding (MoU), the companies will develop a service allowing corporate and institutional clients to offset their carbon directly from their Mashreq corporate accounts.
Fils is a state-of-the-art corporate-grade digital platform that supplies underlying infrastructure for financial institutions, banks and other organisations to launch standalone, sustainable-focused products like carbon offsetting. The digital platform aids the transition to an Environmental, Social, and Corporate Governance (ESG) compliant business landscape.
The initiative is intended to combat the misleading practice of 'greenwashing' by utilising blockchain technology to track carbon credits, preventing double counting and ensuring transparency. The MoU was signed at Mashreq's Global HQ by founder of Fils, Nameer Khan, and Head of Corporate and Investment Banking Group at Mashreq, Joel D Van Dusen, under the guidance of UAE's Chief Trade Negotiator and Assistant Undersecretary for International Trade Affairs at the Ministry of Economy, H.E. Juma Al Kait.
The collaboration represents the initial step in Mashreq's strategy to develop specialised carbon offsetting financial products. The bank plans to launch these products in collaboration with selected UAE-based Mashreq corporate clients in the first half of 2024, marking a pivotal moment for the region's financial sector.
Joel D Van Dusen, Head of the Corporate and Investment Banking Group at Mashreq, commented: "This initiative will have a broad impact on Mashreq's corporate clients, offering a solution designed to contribute towards environmental sustainability. It also reinforces the UAE's position as a pioneer in integrating sustainability into its economic and financial sectors, aligning with the nation's role in hosting COP28 and its ambition to lead global sustainability efforts. Furthermore, the pioneering initiative signifies Mashreq’s dedication to sustainable practices."
Mashreq's MoU with Fils adds to its existing series of sustainable finance initiatives, forming part of the bank's global ESG platform, Climb2Change. The initiative coalesces the bank’s extensive ESG milestones with its contribution to forming a sustainable future and the financial solutions needed to combat climate change and achieve a net zero future.
The new carbon offsetting corporate offering from Mashreq reflects the growing usage of carbon credits. Globally, 41% of companies plan to use carbon credits to meet their carbon reduction targets, and the carbon credit market is expected to grow at a 30% CAGR over the years to come.
Nameer Khan, Founder of Fils, added, "Fils partnership with Mashreq in the development of a ground-breaking carbon offsetting product is a powerful catalyst for the evolution of ESG enforcement across the region’s financial markets."
The initiative aligns remarkably well with the UAE's hosting of COP28. It also follows the UAE's commitment to achieve net-zero emissions within its borders by 2050, in line with the rapid growth of the global voluntary carbon market. The goal is an indication of a pledge to both domestic and international environmental sustainability efforts.
Mashreq, as a responsible financial institution, is devoted to fostering, supporting and enabling sustainability-related innovation in the financial sector, echoing its commitment to customers about a sustainable future and towards social impact which enables UAE as a global beacon of financial innovation and excellence.