Dubai: The Dubai Financial Services Authority (DFSA), together with other members of the United Arab Emirates (UAE) Sustainable Finance Working Group (SFWG), has launched a public consultation on draft ‘Principles for Climate Transition Planning’ (the Principles).
This marks a further step in the SFWG’s ongoing efforts to enhance the UAE’s sustainable finance ecosystem. The proposed Principles are designed to assist a broad spectrum of financial institutions in developing robust, credible, and transparent climate transition plans.
These plans are intended to serve as forward-looking frameworks that embed climate-related goals into an institution’s core objectives, governance structures, risk management systems, and operational strategies.
The draft outlines eight foundational components of effective transition planning, including setting clear transition objectives, establishing strong governance, and integrating climate considerations into strategy and risk management. It also emphasizes the importance of defining metrics and targets, enhancing data collection and customer engagement, promoting transparent reporting, ensuring effective implementation, and committing to regular review and updates.
Designed to apply proportionately across various types of financial institutions, the Principles are both flexible and forward-looking, ensuring alignment with evolving global standards and best practices.
The aim is to enable financial entities to better manage climate-related risks and opportunities, inform strategic decision-making and product innovation, and contribute to broader climate policy targets.
The DFSA and SFWG emphasize that transition planning not only strengthens risk management but also supports sustainable development by embedding climate factors into financial systems, thereby promoting transparency, accountability, and long-term resilience in the UAE’s financial sector.
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