Creating an Ethical Banking Index

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Creating an Ethical Banking Index


As a result of the Bank’s focus on customer-centricity and proactive approach towards ethical banking, ADCB benchmarked higher than the market in the Ethical Selling Index for the banking industry in UAE. The Bank’s score placed it at an ‘Optimising Level’ based on the leading practices adopted for the design and implementation of our approach towards ethical selling in the Bank.

Ethical banking is a cornerstone of the UAE Banking Federation’s (UBF) drive to build best practice and bring consistency to the banking industry in the UAE. In 2022, the Federation developed the ‘Ethical Selling Framework’ aimed at building greater confidence in the financial system. This framework is aligned with the Central Bank of UAE’s Consumer Protection Regulation.

A list of KPIs, linked to Consumer Protection Implementation Standards, was used by banks to assess their approach to ethical selling. PwC was engaged as an independent party to help produce the index and create an assessment tool to demonstrate how banks were approaching ethical banking in the country. This tool assesses the maturity level of each bank regarding ethical selling across three categories – staff capabilities, control and monitoring processes, and compensation and incentives.

To support staff capabilities, ADCB provides extensive training for all employees to ensure they maintain an in-depth understanding of the Bank’s policies and ethical approach. In addition, members of the investment teams must be certified before they can offer any investment products.

Meanwhile, ADCB has a comprehensive network of customer experience forums, research panels, and KPIs ensuring the Bank is able to measure and monitor service levels and customer feedback to drive a process of continuous improvement. This includes promoting greater transparency, through the ‘Key Facts Statement’ which give clear and precise information about the product.

Compensation and incentives are based on a set of KPIs for each employee and are designed to promote ethical selling and quality sales.

The assessment has also served to illustrate where improvements can be made and ADCB will continue to focus on enhancing its approach towards ethical banking.

Inaugural green bond supports financing of low-carbon initiatives for a net zero economy

The issuance of an inaugural green bond in 2022 represents a milestone in ADCB’s sustainability journey, combining international best practice with the Bank’s strong market position to mobilise global capital to support financing low-carbon businesses and projects.

The green bond underlines ADCB’s commitment to support the UAE’s transition to an inclusive, net zero economy.

The USD 500 million, five-year Reg S issuance was oversubscribed almost four times after attracting a range of local, regional, and international investors that placed total orders of over USD 1.9 billion. The bond was priced at a spread of 115 basis points above treasuries with a 4.5% coupon rate, reflecting confidence in the Bank and its approach to managing ESG risks and opportunities.

Proceeds support ADCB’s pledge to provide AED 35 billion in green financing by 2030 – in line with criteria set out in a Green Bond Framework adopted by the Bank in 2022. Eligible initiatives include projects or companies associated with renewable energy, green buildings, sustainable water and wastewater treatment, clean transportation, energy efficiency, pollution prevention and control.

ADCB’s Green Bond Framework, which aligns with the UN Sustainable Development Goals (SDGs) and based on the International Capital Markets Association (ICMA) Green Bond Principles, is governed by a cross-functional Green Bond Working Group reporting to an executive-level Group Sustainability Committee, Chaired by the Group CFO.

In accordance with industry best practice, ADCB obtained a ‘Second Party Opinion’ to externally verify the sustainability quality of the Framework and alignment with ICMA’s Green Bond Principles. The favourable pricing for ADCB’s issuance was supported by the Bank’s strong credit ratings of A/ Stable/A-1 from S&P, A+/Stable/F1 from Fitch, “AA” ESG rating from MSCI, and ESG risk score of 21.0 (Medium Risk) from Sustainalytics.

As a result of ADCB’s robust ESG approach, the Bank’s inaugural bond was selected to feature in the Bloomberg MSCI Green Bond Index.