PC: The National
Dubai Islamic Bank (DIB), the largest Islamic bank in the UAE, has announced the launch of its first-ever Sustainability-Linked Finance Facilities Financing Framework. In support of the climate-positive actions in the country, DIB becomes the first framework of its kind published by an Islamic bank in the world. The framework aligns with the principles and guidelines on Sustainability-Linked Loan Principles and Guidelines (SLLBG) set by the International Capital Market Association (ICMA).
The newly coming framework provides a clear set of definitions of the eligible Sustainability-Linked Finance (SLF) Facilities. DIB will be able to structure certain financial instruments for the eventual issue of these facilities in connection with the financing and refinancing of them for their components in line with climate change mitigation. For credibility and impact, the framework includes pre-established Key Performance Indicators and Sustainability Performance Targets that are aligned with ICMA’s guidelines. Additionally, any SLF Facility covered by the framework will comply with the Loan Market Association’s (LMA) Sustainability-Linked Loan Principles (SLLP).
Dr. Adnan Chilwan, Group Chief Executive Officer at Dubai Islamic Bank, went on to share that the importance of this milestone enhances the bank’s ESG journey. He elaborated that the new framework reinforces DIB’s efforts toward sustainability after building and publishing its debut Sustainable Finance Framework in the year 2022. He pointed out that the initiative is important to the bank’s strategy of “Finance a Sustainable Future” as it targets to have 15% of its portfolio in sustainable finance by 2030.
Dr. Chilwan also indicated that the framework is going to support existing and new clientele at both local and international levels with their transitional changes towards sustainable business modeling in fulfilling positive climate impacts. He praised the contribution framework for ensuring a clear understanding of environmental and climate-positive commitments throughout these sustainability journeys.
Throughout their life, DIB will publish an allocation and impact report at least annually on their Sustainability-Linked Finance instruments. The SLF Facilities included in the report will undergo evaluation by a Second Party Opinion (SPO) and receive limited assurance from an independent party. ISS-Corporate (ISS) has already provided an SPO, assessing the framework’s alignment with ICMA’s SLLBG. Standard Chartered Bank played a key role in developing the framework as the sole service provider.
In addition to this milestone, DIB has also renewed its Asset-Based Sustainable Finance Framework in 2024, which received a Second Party Opinion from ISS.
