Amal: This is Reimagining Our Region, your go-to podcast for regional insights and trends. Each episode brings together expert discussions on the challenges and opportunities shaping the Middle East, from economic shifts to emerging technologies.
I am Amal Larlhid, Partner at PwC Middle East.
Patricia: And I’m Patricia Keating, Senior Manager at PwC Middle East. We'll explore how businesses in the Middle East are adapting to remain competitive, focusing on business model reinvention, sustainable growth, and the transformation needed to thrive in an evolving landscape.
Welcome to today's podcast. ESG and sustainability are no longer optional add-ons for businesses. They have become essential. With regulation tightening and stakeholders pushing for greater transparency, companies need to adapt, or they will not survive.
But what does that really look like in practice? And how are businesses balancing sustainability commitments with their commercial objectives? And what role does ESG play in driving that long-term resilience and competitiveness?
To help us unpack all of this and how to drive real impact in their business, I'm joined by Vijaypal Singh Bains, Chief Sustainability Officer and Group Head of ESG at Emirates NBD. We are very, very excited to learn about his insights on the evolving ESG landscape and the challenges that businesses face in implementing those sustainability initiatives.
Welcome, Vijay.
Vijay: Thank you so much, Patricia. It's a great honor to be here with you as well.
Patricia: Lovely. Listen, we have spent a lot of time over the last 12 months talking about sustainability and some of the challenges out there, but let's talk about ESG in terms of the role that it plays within the business environment.
It has moved from corporate responsibility and that kind of CSO space to becoming a core strategic pillar. You have seen quite a lot of shifts in that space.
What are you seeing that businesses are doing and how they're approaching that ESG component today?
Vijay: I think what we're seeing increasingly in the region and globally is sustainability as a profit driver. Those companies that see it as a profit driver are already seeing that it’s opening up new markets and new opportunities for them as well.
We are, however, also seeing regulations. I think in the last 12 months, regulations have increased. We're seeing CSRD in Europe, CSDD, CS triple D, I should say.
Patricia: We are getting into acronyms.
Vijay: We are getting into acronyms early on.
Patricia: We love a good acronym here.
Vijay: But what's happened in the last six months is a consolidation of a lot of those EU regulations, as well as regulations around the world. Actually, that's what really has been welcomed by the market: to have a right-sized regulatory approach.
I think finally knowledge of sustainability has really increased. We're asking the right questions around circular economy and greenwashing as well. It's no longer just a topic for the sustainability team. It's a topic for the CEO and boardroom, and we've seen that through the survey as well.
Sustainability and all new trends are seen with a sustainable lens - from AI technology to climate technology as well. So, it's really part of that boardroom conversation now.
Patricia: Yeah, absolutely. Now, the strategic side is important. Regulation and compliance are important. But so is access to capital to enable all of this. And that is really where the businesses will find the power and the ability to take action.
There are lots of sustainable finance models, right? There are green bonds, carbon markets, and the financial ecosystem.
Looking at the bigger picture, Vijay, where do you see the biggest opportunities when it comes to climate finance?
Vijay: I think for me renewable energy is huge. We have wonderful talks about AI technology. Our need for energy is really increasing around the world. Per capita consumption is really increasing. That's driving the need for more energy.
We've also seen inflation increase. So actually, we need to scale up renewable energy to beat inflation. We see a lot of opportunities in the UAE and GCC in general, but also around the world as well.
I think secondly what we see is sustainable finance is scaling. In corporate lending, more and more of our clients are not just talking about sustainable finance as an instrument, they're saying this is an essential part of our access to capital.
So actually, even if we aren't really thinking about conventional, we should have a sustainable finance strategy so that we can maximize our liquidity in the markets.
Patricia: Can you expand on that a little bit? Because that's quite interesting. What you're saying is that the customer is almost demanding it because it's actually a strategic core for them.
Vijay: Yeah, certainly. Sustainable finance markets have been growing substantially both in the region and globally. Now, in order to access those green bonds, social bonds, social loans, you need to have a framework and a strategy.
What we saw during COVID and the credit crunch, is those markets “close up.” What a lot of CFOs and treasurers are saying is, we really need to have this as part of our arsenal to access the capital, because if there are any gaps, we need to be able to access that, in the same way that we have Shariah-compliant products.
I think also importantly for sustainable finance, it's a growing part of liquidity all around the world. More and more banks are investing in it; more and more states and governments are investing in it as well.
It's really important that treasurers and CFOs have that forward strategy. Often as they talk to us, they are knocking on the door rather than us knocking on their doors, which is brilliant to see.
And I think it's the right thing to do, not just for the world, but also for the corporation as well.
Patricia: Yeah, I think it's that policy-driven financial incentives that are coming through that are helping to enable what you're describing. Now, it's not just about those sorts of corporate financial instruments. It's about the venture capital world as well.
Our recent State of Climate Tech report, for the second year in a row, has reported a decline in the VC funds that are out there to help sustain emerging technologies that are coming into the market - to help companies not just transform their financial models, but to transform their actual business models.
There are some areas of investment that are still standing out. What's the bank's view on this? Where are you seeing the opportunities? And how can we maybe stimulate a more enriched VC market for these frontier technologies?
Vijay: I think it's a really great question. There has been a decline. I think we're also all looking this year as well.
There is an elephant in the room and it’s AI technology.
Patricia: We say AI and everything.
Vijay: It's AI and everything, at PwC and globally. That has taken in a lot of capital over the last 24 months. We're going to see that continue to grow as well.
With sustain tech, clean tech, and climate tech, one of the challenges is access to innovation. It's quite capital-intensive and quite high risk as well.
What we're going to see in the next 24, 36 months - and it’s definitely being discussed at COP - is how we can support venture tech and really invest in climate.
Now, that isn't always the role of a commercial bank. That is the role of innovation funds and research funding. That's probably what we need to see in the market—more rebates for technological innovation.
The oil and gas industry has had 200 years to innovate.
Patricia: And they do innovate, right?
Vijay: And they do. They do an absolutely fantastic job. When we see net zero, drone technology, AI technology being used, methane abatement - absolutely fantastic.
I think we need to give a bit more time for net zero technologies to catch up. The only way we're going to hit net zero is by innovating in hydrogen, ammonia, and other technologies as well. But there has to be more investment in research.
And I think once those innovations happen, the funding follows.
Patricia: I mean, you're pretty close to the coalface on this kind of thing, and also what the climate techs are facing.
When we did our roundtable and we've done the interviews with the climate techs, we were quite surprised. Our assumption was that funding was going to be a big issue, but actually very few of them mentioned that.
They talked about other non-financial challenges that they face in the market.
What are some of the things that you're hearing there? What are some of the things that we can maybe do about that?
Vijay: I think the number one comes as regulatory hurdles. I think that's the biggest one around new technology being tested and being able to scale.
I think scaling is the second one. Access, not just to capital - because, as you said, I think we're all looking to invest - but actually it's making sure you're plugged in at an enterprise grade.
That's where they're looking to go. We have enterprises globally that have different risk profiles, and they're asking: how can we get plugged in? Because actually, we can support them in innovation as well.
We, as a bank, are being asked really different questions - not just finance questions. It's how can you plug us into your infrastructure? How can you introduce us as well?
Finally, it's about pathways for support. It's saying which countries will support us. And there's competition as well for innovation.
Over the next 20, 30 years, we're going to see the innovation economy really, really grow. So actually, it's where they get the most rebates, but also finally, access to talent.
I think one of the most challenging areas is access to the right engineering and technology talent for these startups. That's the most common question that comes in. Often, they're paying a premium for a resource as well.
Patricia: Yeah, I mean, it's a war for talent out there.
Even having people with the right skills, being educated at the university level - it’s that whole education value chain. What are the universities teaching these young people that are coming out, ready to go into these frontier, new innovative, never-been-done-before technologies?
We could sit here and talk about what people should do. But I think that Emirates NBD is great at actually putting its money where its mouth is and learning from those experiences.
Could you tell us a little bit about some of the things that you guys are doing around innovation and sustainability? I know you guys have made, even with the investment fund, some of the investments directly into this new set of climate fintechs.
Vijay: I think it's a brilliant question. I think we certainly have put our money where our mouth is.
We invested in a climate startup called Agivar. We have a startup innovation fund, and we particularly look at fintech and sustain tech in that space as well.
We supported Agivar on a series A funding level, but also from a management level - to ground markets access as well. And we've been on a really great journey together, seeing what works and what doesn't work.
For us, the key one is: can we recommend this to ourselves, but also to our clients?
We do startup rounds as well, with startups, where we give them mentoring from a fintech perspective. We're now looking at doing that for climate tech.
And again, as you said, that's the biggest statement. They don't always need access to capital. It's access to enterprise expertise.
Finally, what we've been able to do is talk about the markets, talk about the growth of the markets, and also when not to put all your bets on something.
I think in sustainability, there is sometimes a bit of hyperbole when people say, “We will invest,” and then that isn't matched up by action.
We're talking about—I'm going to say some of the boring things, but they are very practical - procurement lifecycles, contracting as well.
We say, “These contracts will take six months.” They say, “No, no, no, it will take a few weeks.” No, it will take six months.
Some of the legal and compliance hours as well. So I think we've really helped Agivar and other startups with that, as well as getting introduced and connected to the right levels, and working those business models.
Patricia: I always like to wrap up with a bit of a forward-looking piece.
We are sitting here in Dubai, almost at the end of Q1 2025. How do you think the rest of the year will shape up for us here in the region?
What are the things that we need to be looking out for and thinking about as we go through the rest of the year?
Vijay: I think this quarter has been, as a bank and for sustainability, really busy - consistent growth.
And we're going to see consistent growth this year in the GCC for sustainability.
That's for a few reasons. One, the government has made a mandated framework for renewable energy, for net zero pathways, and for carbon credits. That's stimulating the market, so we're seeing that continued growth.
Secondly, it's mainstream sustainability.
My job is - and I don't want to make myself redundant here on a podcast...
Patricia: AI might do that, Vijay.
Vijay: Yeah, yeah. AI will do that. Oh God. Oh no. It's all game over. AI Vijay is coming.
My job is mainstream sustainability in a bank and in the market as well, and to put it in everyone's job roles.
I think we're doing really well. We're always pushing ourselves. Our success is not just because of the sustainability team, who is fantastic, but also the rest of the bank being incredibly supportive as well.
And I think what we're seeing this year is companies that invest in mainstreaming - like PwC and Emirates NBD - are really seeing the market grow and access grow as well.
Patricia: Thank you so much for taking your time to speak to us today. I've really enjoyed speaking to you again and learning a bit more about your thoughts on what's happening in the space of climate tech.
That's a wrap for today's episode. We've explored how ESG is evolving beyond compliance and the role that climate finance is taking in accelerating sustainability.
One thing is clear: there is progress. Sustainability requires a combination of collaboration, strategic commitment, and innovation.
Whether you're an investor, a business, or a startup, please join us on this journey. Like and subscribe and share your thoughts on sustainability - and we'll see you next time.
