The UAEs Sovereign Funds’ investment strategy forms the vital core with ESG foundation


Within the core heart of the investment strategies regard sovereign wealth funds within UAE, the Environmental, Social, and Governance (ESG), with deployment of billions of dollars at home, across wider Middle East and North Africa territory as well as elsewhere globally.

The Director of Adia’s Strategy as well as planning Department, Jean-Paul Villain stated on Wednesday that: “Like all investors, we are convinced that sustainability is extremely important, which is becoming even more important in the future. When we look at ESG to spell out that G- (governance), is something which portfolio managers have always done, it is something which is part of our activities and our approach. He told an online panel during the Abu Dhabi Sustainable Finance Forum.”

As according to the Sovereign Wealth Fund Institute, the Abu Dhabi’s overall Sovereign Fund, that will not disclose the size of its own invests on behalf of the Abu Dhabi government and is also the third-biggest sovereign fund-post Norway as well as China.

The fund is having a bet on technology progressions and climate variation to central for new and sustainable investment prospects, it stated in its 2019 annual report unrestricted the preceding month.

Mr Villain stated that: “Adia holds several types of assets counting equities, fixed income, real estate as well as private equity, but has always been “conscious” about governance hazards when investment in firms.”

He was speaking on the panel debate during the Abu Dhabi Sustainable Finance Forum on Wednesday alongside David Crofts, executive director of enterprise risk management and responsible investment at Mubadala Investment Company; Vasilios Siokis, chief risk officer at Emirates Investment Authority and Jamie Levy, general counsel at Abu Dhabi Investment Office.

Adia has already capitalized in two renewable establishments in India and is constructing its real estate portfolio in line with environmental policies, Mr Villain stated.

Abu Dhabi’s strategic investment arms, both Adia and Mubadala enterprises, with an overall valued asset of $232 billion, form an integral part of the One Planet Sovereign Wealth Funds initiative – a global partnership of SWFs that look to participate in climate variation reflections into investment conclusion and sustenance of the global climate action.

Mubadala has a collection of investments that distances six continents and comprises Masdar, the UAE-based green energy developer.

Mr Crofts announced that: “As a long-term global investor, we believe it is critical to consider all risks when making investment decisions and when managing existing assets. ESG is increasingly material to the performance of our investment both in terms of downside risk and opportunities. “Mubadala is vigorously occupied to imbed ESG consideration into both portfolio approaches and each stage of the investment lifecycle.”

Masdar, with its head office in Abu Dhabi, has active reserves in more than 30 nations and has so far deployed $19.9bn in renewable projects counting wind and solar progression.

The panel also discussed hurdles confronted by global investors in terms of evaluating sustainable investments.

“The majority of global investors have some kind of ESG or sustainability policy or guidelines,” Mr Siokis of EIA said. “But there are obviously a number of challenges when it comes to the monitoring of these guidelines,” he said.

It is tough to guide businesses in terms of how to reveal sustainability-related information, he added.

“It is a very challenging terrain and the way investors can tackle this is obviously going through a very in-depth due diligence during their investment decision process.”

Mr Levy of Adio – a government body that manages Abu Dhabi’s public-private partnerships for infrastructure development and a platform that promotes investments into the emirate – is looking at ways to demonstrate “an ESG dividend to the economy in Abu Dhabi” and its people.

“In respect of ESG we look at the PPP programme and we look at what long-term infrastructure means in respect to ESG,” he said.


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