Gulf leaders are embracing green finance as their new economic pillar. This shift was front and center at last month’s Gulf Transition and Sustainable Finance Conference in Abu Dhabi. Financial institutions, government officials, and global investors gathered to map out the region’s sustainability roadmap through 2025 and beyond.
“The Gulf states are no longer just talking about climate finance—they’re actively redirecting capital flows toward sustainable development,” remarked Sarah Al-Suhaimi, chairperson of the Saudi Tadawul Group, during the opening panel. Her statement captures the growing momentum behind the Gulf Cooperation Council’s pivot toward environmental investments.
Recent data from the Gulf Financial Markets Authority shows sustainable finance in the region has grown by 43% since 2021, reaching nearly $18.5 billion in green bonds and sukuk issuances. The UAE and Saudi Arabia lead this charge, accounting for over 70% of the region’s green financial instruments.
The conference highlighted several key initiatives shaping Gulf green finance through 2025. The UAE Sustainable Finance Framework, launched earlier this year, aims to mobilize $160 billion in climate-aligned investments by 2030. Saudi Arabia’s Public Investment Fund announced it would allocate $10 billion specifically to renewable energy projects across the Kingdom and neighboring states over the next three years.
Qatar’s financial regulators introduced new ESG disclosure requirements for listed companies, while Bahrain unveiled plans for a dedicated sustainable finance hub within its financial district. These developments signal a coordinated regional approach to green economic transformation.
“What distinguishes the Gulf approach is how sustainability is being integrated into existing financial structures rather than treated as a separate category,” explained Dr. Nasser Saidi, former chief economist at the Dubai International Financial Centre. “Islamic finance principles already align with many ESG objectives, creating natural synergies unique to this region.”
International financial institutions have taken notice. The World Bank committed $5 billion in technical assistance and financing for climate-resilient infrastructure across Gulf nations. Meanwhile, BlackRock announced the creation of a $3 billion Middle East Climate Infrastructure Fund focused primarily on Gulf investments.
One notable conference theme was the interplay between traditional energy revenues and green finance ambitions. Rather than viewing these as opposing forces, Gulf nations are leveraging oil and gas profits to fund their clean energy transition. This pragmatic approach was evident in the Abu Dhabi National Oil Company’s presentation of its $15 billion decarbonization strategy, which includes significant investments in carbon capture and green hydrogen.
Climate risk management emerged as another critical focus area. Rising temperatures and water scarcity pose existential threats to the region, driving financial institutions to develop sophisticated climate risk assessment tools. The Central Bank of the UAE presented its new climate stress testing framework, requiring banks to evaluate portfolio exposure to physical and transition climate risks.
“We’re moving beyond viewing climate action as charity or corporate social responsibility,” noted Khalid Al Rumaihi, CEO of Bahrain’s sovereign wealth fund Mumtalakat. “It’s now fundamentally about risk management and identifying new growth opportunities in a carbon-constrained world.”
The conference also addressed challenges facing Gulf green finance. Standardization of ESG metrics remains inconsistent across the region despite recent progress. Transparency concerns persist in some markets, while technical expertise gaps hamper project evaluation. Several panels discussed solutions, including regional taxonomy development and capacity-building programs with international partners.
Smaller businesses face particular hurdles in accessing sustainable finance opportunities. To address this, Kuwait’s National Fund for SME Development announced a $200 million green financing program aimed specifically at small and medium enterprises working in sustainability sectors.
Technology is accelerating the Gulf’s green finance evolution. The Saudi fintech firm Tameed demonstrated its new digital platform connecting green project developers with impact investors. Meanwhile
