The introduction of carbon offsetting service by Mashreq, a leading financial entity in the Middle East and North Africa (MENA) region, in collaboration with UAE-based fintech company Fils is expected to transform the ESG landscape of the UAE and the MENA region as a whole. This collaboration seamlessly integrates carbon offsetting into the daily cash management activities of corporations, allowing them to manage their carbon footprint through their Mashreq corporate accounts directly.
This partnership is poised to address several longstanding issues in the carbon credit market, such as accessibility and the minimum purchase requirements, by offering fractionalized credits through Fils. This approach simplifies the process of purchasing, auditing, and reporting carbon credits for corporations, making environmental responsibility an integral part of their financial operations.
The introduction of this carbon offsetting service is timely, as 41% of global companies plan to utilize carbon credits to meet their carbon reduction targets. With the carbon credit market expected to grow at a 30% Compound Annual Growth Rate (CAGR) in the coming years, this initiative marks a significant step forward in the approach of the financial sector of this region to environmental responsibility.
Fils, recognized for its innovative digital platform, provides the essential infrastructure that enables financial institutions and various organizations across sectors to launch independent, sustainability-focused products like carbon offsetting. This initiative aligns with the broader transition towards an ESG-compliant corporate landscape, making it simple for companies to incorporate sustainable and climate-conscious practices into their business models and customer interactions.
The MoU was formalized recently at Mashreq’s Global Headquarters by Fils founder Nameer Khan and Mashreq’s Head of Corporate and Investment Banking Group, Joel D Van Dusen. The signing was supported by the UAE’s Chief Trade Negotiator and Assistant Undersecretary for International Trade Affairs at the Ministry of Economy, H.E. Juma Al Kait, highlighting the significance of the initiative within the UAE’s financial and environmental strategy.
Joel D Van Dusen emphasized the impact of this initiative on Mashreq’s corporate clients and its contribution to the UAE’s pioneering efforts in embedding sustainability into its economic and financial sectors. This initiative is particularly relevant as the UAE fortifies its COP28 commitment to leading global sustainability efforts.
The collaboration between Mashreq and Fils is part of Climb2Change, Mashreq’s broader sustainable finance initiatives under its global ESG platform. This platform aims to integrate the bank’s ESG milestones with its efforts to combat climate change and achieve a sustainable, inclusive net-zero future. By establishing transparent Key Performance Indicators (KPIs), the initiative aims to eliminate greenwashing and promote greater accountability and implementation of sustainable practices.
Many financial institutions and corporations in this region are expected to follow similar practices to ensure a transparent carbon offsetting mechanism.
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