Qatar Sustainable Finance Framework marks significant milestone for region

Marie Chowdhry and Sarah Khasawneh of Pinsent Masons were commenting following the recent QCB announcement demonstrating Qatar’s aims to “balance economic growth with environmental and social responsibility”.

The QCB’s Sustainable Finance Framework aligns with global trends towards environmental, social and governance (ESG) criteria and sustainable development goals. The framework is relevant to financial institutions, investors, and businesses operating in Qatar. This includes banks, asset managers, insurance companies, and corporate entities that are involved in or looking to engage in sustainable finance activities. Additionally, it is relevant to regulatory bodies and policy makers who are shaping the financial landscape in Qatar.

For financial institutions and investors, the framework provides a structured approach to integrating sustainability into their operations and investment strategies. It also sets out to enhance transparency, accountability, and reporting standards, which are increasingly demanded by stakeholders and regulators. For businesses, it provides new opportunities for green financing and investment, which can lead to cost savings, improved risk management and enhanced reputation.

Chowdhry said: “The QCB’s framework is a clear indication of Qatar’s commitment to integrating sustainability into the financial services sector. The framework aims to support the economy and financial institutions by directing investments towards sustainable projects. It includes guidelines for the issuance of sustainable financial products such as loans, bonds, and sukuks, applicable to financial institutions and capital market participants. This framework offers businesses a unique opportunity to enhance sustainability credentials, access new financing avenues, and meet growing demands of stakeholders who have a green mandate. By aligning with this framework, businesses can not only comply with regulatory standards but also drive innovation and growth in a sustainable manner.”

Following the framework announcement, proactive steps should be taken to ensure that financial practices align, Khasawneh said. This may include conducting an internal review of current practices and identifying areas for improvement in sustainability as well as developing or updating sustainability policies and strategies to comply with the framework.

“Businesses may also benefit from engaging with stakeholders, including investors and customers, to communicate their commitment to sustainable finance in addition to leveraging the framework to access new financing opportunities, such as green bonds and loans,” she said.