Saudi Arabia’s sovereign wealth fund is committed to growing its environmental, social and governance (ESG) investments and platforms, said a top official.
According to Fahad Al-Saif, head of corporate finance, Public Investment Fund (PIF), the kingdom is “very serious” about being a “proactive player in creating sustainable change”.
PIF – which is at the heart of the kingdom’s 2030 transformation vision – plans to invest 3 trillion riyals over the next 10 years and has a mandate to invest 150 billion riyals in Saudi Arabia annually.
ESG is becoming the “norm”
“ESG is becoming a norm market and emerging markets need to get ready for it,” Al-Saif said at the UK/Saudi Sustainable Investment Forum in London this week. “We need to make it easier for investors to choose ESG platforms in Saudi Arabia.”
PIF has asked banks to help it develop an ESG framework, four sources told Reuters on Monday, a move that could allow it to expand its funding base to attract ESG-focused investors.
Fahad Al-Saif, head of corporate finance, Public Investment Fund (PIF).
One of the sources said developing an ESG framework was likely a precursor for a multimillion dollar bond sale, which would be the Saudi wealth fund’s first.
“PIF is the kingdom’s driver for ensuring we have a sustainable economy and sustainable finance,” said Al-Saif. “We are a global player with a local mandate, investing in line with sustainability goals.”
UK and Saudi to join green forces
The Lord Mayor of the City of London, Alderman William Russell, praised the kingdom’s efforts to meet sustainability targets, such as the diversification of energy sources by producing 5.9 gigawatts of renewable energy by 2030.
Saudi Arabia is home to a slew of sustainable developments, such as PIF-owned The Red Sea Development Company (TRSDC), which secured earlier this year a $3.8 billion “green” loan for new hotels powered by renewable energy.
PIF is also the main investor in Neom, a development in Saudi Arabia whose flagship project is a futuristic zero-carbon city.
William Russell, Lord Mayor of the City of London
“The UK and Saudi Arabia have greatly supported each other for years,” Russell said at the London forum.
“Both countries are incredibly ambitious in our sustainability visions. The UK welcomes Saudi’s initiatives – projects like TRSDC and Neom are exactly the sort of initiatives that help us and join us on the green brick road,” he said.
The Lord Mayor invited Saudi Arabia to prepare for bilateral sustainability agreements ahead of the Cop26 climate change summit in Glasgow, UK, this year.
“We can use that global stage to make concrete UK and Saudi partnerships both in sustainable infrastructure and clean energy,” Russell said. “We both have the passion and ingenuity to make this a reality – let’s commit and go green together.”
Exchanging ideas
Julia Hoggett, CEO, London Stock Exchange (LSE), said that stock exchanges have a “vital role” in building a green agenda.
LSE has been working with the Saudi stock exchange Tadawul in supporting its efforts to adhere to green standards, she said.
Julia Hoggett, CEO, London Stock Exchange (LSE).
“The LSE has a big role to play and we have to lead by example – we have committed to net zero. We need to move towards a [globalised] standardised set of disclosures. I’d love to visit Saudi Arabia in person as the number of things we can collaborate on is significant,” Hoggett added.
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