As the global community prepares for COP30 in Belém, Brazil, the urgency surrounding climate action has reached new levels. With 2024 confirmed as the first full year above the 1.5°C threshold, the stakes for governments, businesses, and financial institutions could not be higher.
Brazilian President Lula da Silva has set the tone by describing COP30 as the world’s “last chance” to avoid irreversible climate tipping points. This is more than rhetoric—there is growing pressure on financial systems to demonstrate that climate ambition is translating into measurable delivery.
For banks, especially those in the Gulf, the path to credibility lies in turning climate pledges into action. The expectations from COP30 go far beyond high-level commitments. They extend to the integrity of disclosures, the transparency of capital flows, and the ability to mobilise finance equitably across developed and emerging economies. The days of aspirational climate language are over; what matters now is implementation.
Expectations from the financial sector at COP30
The financial sector enters COP30 under intense scrutiny. With the $1.3 trillion climate finance pledge from COP29 still under the spotlight, stakeholders are demanding verifiable evidence of fund mobilisation—especially for adaptation, loss and damage, and nature-based solutions. This year’s Amazon location underscores a broader push for climate justice, inclusion, and results-based finance that goes beyond multilateral institutions.
A key initiative gaining traction is Brazil’s proposed $125 billion “Tropical Forest Forever” fund, which aims to channel capital market mechanisms toward forest conservation. This initiative signals a growing expectation for banks to underwrite and deploy innovative instruments that deliver both financial and environmental returns. It also reflects a shift from theoretical alignment to practical contribution.
At the same time, transparency in disclosures is non-negotiable. With the implementation of IFRS S1 and S2, by some regulators in the GCC, banks must not only disclose their climate risks and opportunities, but also provide accurate, traceable data on financed emissions and transition plans. There is rising concern from regulators, investors, and civil society about vague decarbonisation pathways and the risk of greenwashing. Credibility will depend on how clearly institutions can explain and substantiate their climate performance.
Equity is another critical dimension. Emerging markets face a disproportionate share of climate risk but continue to lack sufficient access to transition finance. Financial institutions are expected to build their internal capabilities to support mid-sized, locally grounded climate projects, which are often overlooked due to perceived complexity or bankability challenges. Supporting these projects is key to delivering a just transition.
The Gulf’s climate finance trajectory
The Gulf banking sector has made tangible progress. The UAE financial sector’s AED 1 trillion sustainable finance commitment during COP28 has been followed by the launch of green and transition sukuks, with mandatory ESG reporting frameworks now in place. Saudi Arabia and Oman are advancing voluntary ESG taxonomies, signaling growing regional convergence with global standards.
On the infrastructure side, climate-linked assets are being delivered. Green hydrogen pilots in the UAE, utility-scale solar projects in Bahrain, and Saudi Arabia’s carbon capture and hydrogen megaprojects highlight that Gulf capital is not just promised—it is being deployed. These developments position Gulf banks as both regional leaders and potential bridges between developed and developing economies.
The region has made notable strides in mobilising capital toward sustainable investments, with significant pledges and emerging frameworks taking shape across key markets. Yet challenges persist.
The absence of a unified, regionally harmonised taxonomy continues to limit comparability, investment alignment, and cross-border flows. A clear taxonomy would offer financial institutions a consistent basis for classifying green and transition activities, enhancing transparency and investor confidence.
Gulf banks must overcome structural hurdles in climate finance, including evolving credit risk frameworks, limited data access, and the integration of climate risks into existing governance structures. As climate regulations become more sophisticated, banks will also need to ensure that they are assurance-ready and equipped for third-party validation.
Looking ahead
COP30 is not just a global summit, it is a credibility test. For the financial sector, especially institutions in the Gulf, the moment demands more than alignment with global frameworks; it requires transparency in execution, leadership in innovation and proof of impact.
At Mashreq, we recognise the complexity of the task ahead, but also its urgency. As a bank committed to the region and its long-term prosperity, we are taking active steps to build internal capabilities, engage with international best practices, and align our strategy with a just, inclusive, and measurable climate transition.
COP30’s focus on inclusion and equity highlights a growing recognition that meaningful climate action must be rooted in human-centric values. By placing communities, livelihoods, and local voices at the heart of global efforts, the summit offers a hopeful vision for a more just and people-driven transition.
Let COP30 be remembered not just for its symbolism, but for being the summit where finance shifted decisively from promises to proof.