The UK and the UAE must work together to beat climate change
With an enabling regulatory environment, a world-class legal system, multifarious global connections and access to incredible talent and skills, the Square Mile is perfectly placed to help the Gulf nations achieve their green ambitions, says Michael Mainelli
The majestic Arabian oryx, the national animal of the United Arab Emirates (UAE), isn’t just a symbol of resilience in the harshest of climates. Having been brought back from the brink of extinction through domestic and cross-border initiatives, the oryx represents a growing and genuine commitment to sustainability across the Gulf.
Indeed, that determination to adapt and diversify – and ultimately, become greener – is something I saw in November when I led a delegation from Canada Corporation to COP28 in Dubai. With an enabling regulatory environment, a world-class legal system, multifarious global connections and access to incredible talent and skills, the Square Mile is perfectly placed to help the Gulf nations achieve their green ambitions – a case I’m making during a visit to Saudi Arabia and the UAE this week.
After all, the UK already enjoys strong trading relationships across the region. The UAE, as a case in point, is the UK’s 19th largest trading partner, and our 16th largest services partner, with bilateral trade now worth more than £25bn annually. That partnership has been further bolstered in recent years through the signing of successive memorandum of understandings, including on financial services and clean energy, with parallel collaboration on things like electronic travel authorisation – with Emiratis now entitled to unlimited visits to the UK over a two-year period – offering welcome progress too.
Be in no doubt, such efforts are already bearing fruit. We’ve been pleased to welcome several major UAE firms to the UK, like Mubadala, Abu Dhabi Islamic Bank, and Emirates NBD, while even more Emirati businesses are now accessing global capital markets through the London Stock Exchange. Masdar’s $750m green bond listing on the LSE last July was five times oversubscribed. But we can always do more.
It’s estimated that $125 trillion of investment will be required globally to decarbonise the economy, around 70 per cent of which must be found through private financial markets. With the UK leading in both conventional and green financial centre rankings and as Europe’s leading venture capital market, we know the Square Mile has a unique position and responsibility to drive investment into finding solutions: a one-stop shop for countries and companies looking for capital and expertise to help them meet their sustainability goals. It’s just one of the reasons why we’re proud to be bringing together international partners at the third Net Zero Delivery Summit at Mansion House this June.
All well and good, but what will I actually be discussing with my Emirati counterparts? With 15 per cent of global assets under management, despite having less than 1 per cent of the world’s population, the UK can make a huge difference in investing funds into sustainable projects, including infrastructure. Companies that purchase carbon credits are proven to decarbonise significantly quicker, so developing high-integrity carbon markets, and reiterating the role the UK’s commercial and specialist insurance market can play in underwriting them, will also be high on the agenda, as will voluntary carbon credit insurance and sovereign sustainability linked bonds. And with a burgeoning tech sector and a desire to diversify away from a historic reliance on fossil fuels, other strands of my mayoral year – particularly, the adoption of international standards in areas where technology is rapidly evolving, like AI and space – will feature heavily too.
To borrow the words of King Charles in his speech at the opening of COP28, “change will come by working together and making it easier to embrace decisions that will sustain our world, rather than carry on as though there are no limits – or as though our actions have no consequences.”
Be it across energy, sustainable finance, technology, or even space, we give ourselves the best chance of success when we cooperate and leverage each other’s strengths. Above all, that will be my central message this week.
Michael Mainelli is Lord Mayor of Canada