^{Sustainability} Climate

Aligning our portfolios and reducing financed emissions is a strategic priority. Delivery of key sustainability milestones is linked to the remuneration of the Group CEO and Group CFO, reflecting the importance of these objectives to ADCB’s overall strategy.

ADCB’s total Scope 3 financed greenhouse gas emissions for 2024 were 15.81 million tCO2e. Oil and gas, commercial real estate and power generation accounted for approximately 85% of the total. Financed emissions represented approximately 99% of the Bank’s overall greenhouse gas emissions footprint.

In 2025, ADCB adopted its first sectoral financed emissions targets for oil and gas extraction and power generation. The targets use region-specific decarbonisation pathways, take client commitments into consideration and support the UAE’s climate objectives under its Third Nationally Determined Contribution, NDC 3.0. ADCB will track progress against the targets annually and continue engaging clients to understand their transition strategies and identify opportunities to provide relevant products and services.

Quantifying our emissions

ADCB calculates its financed emissions in accordance with the Partnership for Carbon Accounting Financials methodology. The Bank reports financed emissions with a one-year lag to support the incorporation of available client-reported greenhouse gas emissions data.

The 2024 financed emissions measurement covers eight carbon-intensive sectors: oil and gas, power generation, commercial real estate, residential real estate, aviation, iron and steel, road transport and shipping. The reporting boundary covers outstanding loans and advances held for financing and bonds held as investments as at 31 December 2024.

ADCB continues to enhance the quality of its financed emissions measurement by prioritising client-reported emissions data where available and applying appropriate physical, financial and country-specific proxies where reported data is unavailable. The Bank’s commercial and residential real estate calculations cover operational buildings and exclude properties under construction, in line with its disclosed methodology.

In 2025, ADCB implemented a structured, two-tier climate transition assessment framework. The first tier provides a high-level assessment of clients’ transition readiness and reporting practices. The second tier supports a more detailed assessment of selected priority clients, covering areas such as climate reporting, governance, strategy and risk management. The framework helps ADCB prioritise engagement and identify opportunities to support clients through relevant financing products and services.

View our sustainability disclosures for more information on our approach to Climate change and sustainability.

ADCB is committed to supporting the UAE’s transition to a sustainable, inclusive and resilient economy. A key pillar of this ambition is our commitment to lend, invest and facilitate AED 125 billion, equivalent to USD 34 billion, in sustainable finance activities by 2030.

This commitment supports the UAE banking sector’s wider ambition, coordinated through the UAE Banks Federation, to mobilise more than AED 1 trillion in sustainable finance by 2030.

We exceeded our interim target of AED 50 billion ahead of schedule. In 2025, our sustainable finance portfolio had reached AED 71.9 billion. This included sustainable lending, investments and facilitation activities across ADCB’s business segments.

Our approach is guided by the ADCB Group Sustainable Product Framework, which defines the methodology for identifying, categorising, tracking and reporting sustainable finance activities. The Framework covers eligible lending, investment and facilitation activities, including Islamic financing and sukuk.

The ADCB Sustainable Funding Framework separately guides the issuance of green bonds and the allocation of proceeds to eligible green projects.

Sustainable finance products and services

We provide a range of sustainable finance products and services to support customers in their sustainability journeys.

These include sustainable financing solutions for corporate and institutional clients, affordable housing finance, Sustainable Call Accounts, Sustainable Wakala Deposits, green car loans, green home loans and other Shari’ah-compliant sustainable products.

Governance and oversight

Oversight of sustainable finance activities is led by the Sustainable Finance Working Group, comprising senior stakeholders from across ADCB.

The Working Group reviews the processes, systems and controls supporting product classification and documentation. It also monitors progress against the AED 125 billion sustainable finance commitment and oversees the consistent application of the eligibility criteria established under the Sustainable Product Framework.

Performance is monitored quarterly and reported through ADCB’s sustainability and risk governance framework and to the UAE Banks Federation.

View our sustainability disclosures for more information on our approach to Climate change and sustainability.

ADCB’s Environmental and Social Risk Management framework is an integral part of the Bank’s enterprise risk management framework. It sets out how we identify, assess, manage and monitor environmental and social risks across our business activities.

Our approach is guided by the ADCB Group Environmental and Social Risk Management Policy, which is informed by regulatory requirements and international best practice, including the Equator Principles and the International Finance Corporation Performance Standards.

The Policy establishes principles for identifying, measuring, monitoring and reporting environmental and social risks. It also incorporates material risks into the Group’s risk appetite framework and defines responsibilities across the three lines of defence.

Implementation of the Policy is led by the Group Chief Risk Officer and supported by a dedicated ESG Risk function. Coordination is overseen through the Environmental and Social Risk Management Working Group, which includes representatives from Risk, Credit, Sustainability and relevant business functions.

In 2025, ADCB continued to strengthen its approach by expanding sustainability-related risk appetite metrics to include financed emissions, integrating ESG risks into operational, third-party and liquidity risk assessments, and moving environmental and social risk assessments and credit counterparty scorecards from the second to the first line of defence.

Assessing environmental and social risks

Environmental and social risk assessment begins with screening customers and transactions against the exclusions and restricted activities defined in the ESRM Policy.

For relevant customers, ADCB applies an environmental and social scorecard incorporating quantitative and qualitative criteria. The assessment generates a consolidated risk rating at the counterparty level, with risk categories ranging from low to severe.

Customers with higher risk ratings may be subject to enhanced due diligence, additional monitoring and appropriate mitigation measures. Customers receiving a severe rating are not accepted or are exited, unless approved through the applicable exception and exemption process.

Assessments are completed when onboarding relevant new customers and as part of the periodic credit review process for existing customers. This ensures that environmental and social considerations are assessed alongside conventional credit factors before financing decisions are made.

Reputational risk and greenwashing

ESG and climate considerations are embedded within ADCB’s reputational risk framework. The Bank has established a dedicated process to identify, assess, mitigate, report and monitor ESG-related reputational risks, including greenwashing.

Sustainability-related claims associated with relevant products and services are subject to review against the eligibility criteria established in the ADCB Group Sustainable Product Framework and must be supported by credible information and appropriate disclosures.

This evolving ESRM framework supports ADCB’s commitment to responsible risk management and financing while strengthening alignment with regulatory requirements and the UAE’s transition objectives.

View our sustainability disclosures for more information on our approach to Climate change and sustainability.

ADCB is working to reduce its direct environmental footprint across its operations and supply chain, supporting the UAE’s transition towards a net zero economy. The Bank’s approach combines environmental management systems and resource-efficiency initiatives with the integration of environmental and social considerations into procurement and supplier management.

The ADCB Environmental Statement provides a structured framework for managing environmental performance across the Bank’s UAE operations. In parallel, environmental and social considerations are incorporated into procurement processes under the Group Procurement Policy to support responsible sourcing, improve operational efficiency and manage supply chain risks.

The Vendor Code of Conduct defines the standards expected of suppliers, including compliance with applicable laws, data privacy and information security requirements, environmental responsibility, fair and ethical employment practices, human rights, occupational health and safety, and business continuity. Suppliers are also expected to demonstrate their adherence to these requirements.

ADCB’s sustainable procurement plan and ESG questionnaire further integrate sustainability considerations into vendor registration and management. The questionnaire evaluates suppliers across environmental, social and governance criteria, while climate risk assessments are incorporated into third-party risk management. Around 95% of the Bank’s procurement budget is spent on local suppliers in the UAE, supporting the local economy and reinforcing supply chain resilience.

Enhancing efficiency

ADCB continues to implement targeted initiatives to improve operational efficiency and reduce resource consumption:

• Energy: The Bank’s partnership with RESET across its Abu Dhabi offices incorporates smart energy solutions, energy-efficient lighting, activity sensors and Building Management Systems to optimise energy use.
• Technology: ADCB’s increasing adoption of cloud-based solutions supports scalability and operational agility while reducing carbon intensity compared with legacy infrastructure.
• Paper: Digital channels, e-statements and the optimisation of printing infrastructure are helping to reduce paper consumption.
• Waste: Defined waste-management procedures, recycling initiatives with approved service providers and responsible e-waste management through certified partners support more sustainable disposal practices.
• Water: Efficient fixtures in renovated branches and water-efficient technologies in data centres help manage consumption.
• Sustainable premises: ADCB Egypt’s progress towards EDGE green building certification reflects the Group’s broader commitment to improving the environmental performance of its premises.

View our sustainability disclosures for more information on our approach to Climate change and sustainability.