COP28 provided a forum for banks, insurers, investors, policy makers and private sector organizations to discuss decarbonisation in detail. A key theme was the adoption of policies and best practices for managing sustainability risks in the financial sector. A new best practice gaining traction is the green ledger approach that helps achieve sustainability goals and one organization leading the way is the United Arab Bank (UAB).
Thanks to its ongoing digital transformation journey, the bank is enhancing its services to its customers and employees, while paving the way for the adoption of SAP’s “carbon accounting” methodology with continuous measurement and reporting of green data.
“It was important to move our IT landscape to the cloud to stay abreast of new technologies,” said Shirish Bhide, CEO of UAB, while making an announcement about the bank’s digitization strategy at the Sustainable Finance Forum at COP28 in Dubai . “The move will prepare us to use the sustainability metrics and analytics built into SAP solutions and lay the foundation for a green accounting approach.”
Based in the United Arab Emirates (UAE), UAB is a mid-sized financial solutions provider offering personalized financial services to both corporate and retail banking. The bank is modernizing its IT infrastructure, using leverage RISE with SAP hosted on AWS to support environmental and workforce sustainability goals.
Financing the green economy
Banks play a key role in making finance available not only for the functioning of the economy, but also in shaping a greener one. By channeling private investment towards the transition to a climate-neutral, resource-efficient and equitable economy, they can help align sustainable finance with the real economy.
According to UN Climate Economic Framework, private sector finance is the largest source of financial flows for climate action, particularly mitigation. But you can’t mitigate what you can’t measure.
To help companies manage bottom-up sustainability business data with real transaction-level data, SAP has developed an accounting system for emissions data that is as auditable, transparent and reliable as a financial data measurement system. Data is vital to look holistically across the value chain to understand where emissions are occurring, set precise net zero targets and identify specific areas for decarbonisation impact.
“SAP really hits the heart of what we do,” Bhide said. “As a responsible corporate citizen, United Arab Bank places a high priority on promoting positive change in the communities we serve and enhancing our contribution to the Sustainable Development Goals. The initiatives we have established in recent years have placed us in a strong position, enabling us to make significant positive contributions in 2023, which marks the UAE’s Year of Sustainability.”
UAB believes that managing ESG risks and promoting a strong sustainability agenda contributes to long-term value creation for its shareholders, its business and the economy at large. To achieve this agenda, it has developed a Sustainability Framework that articulates its commitment and communicates it to its stakeholders.
UAB puts sustainability at the heart and core of everything it does, be it people, processes or portfolio. She sees herself as a consultant to her clients to help them develop their own sustainability strategies. But before it becomes the bank, the bank tries to become a model.
Moving to the Cloud on AWS, for example, allows UAB to eliminate many of its servers, reducing energy consumption, which automatically reduces emissions.
“It is important for us to take our customers with us on this journey. Every time we meet customers, we try to educate them. It’s a long shot, but I’m a big fan of baby steps, because there are 99 steps between zero and one hundred. For me, every step forward is big,” said Bhide, summarizing UAB’s philosophy of accelerating digitization to become more sustainable.
The transition to a greener economy requires massive changes not only in IT systems but in all systems, including manufacturing, food production and energy, all of which must be financed.
“We know our customers want to do the right thing, but often don’t know where to start. We can help them look at their product portfolio and look at where their suppliers are sourcing their materials from. We help them look at their production or transport processes to identify ways to start reducing their carbon footprint. We help them identify steps, however small, to reduce their carbon footprint,” he explained.
UAB is also investing in new enterprise resource planning (ERP), human capital management (HCM) and customer relationship management (CRM) systems from SAP to eliminate non-value-added tasks so staff can focus on addressing needs of his customers. UAB will also upgrade its procurement functions. By implementing SAP Ariba and SAP Signature Management with DocuSign, UAB will benefit from the digitization and automation of its procurement processes, which can reduce paper waste by up to 80%.
Sergio Maccotta, Senior Vice President, SAP Middle East and Africa – South, commented: “By expanding its existing relationship with SAP and embracing cloud computing, UAB is future-proofing its business to enable it to meet the market changes with flexibility. This lays the groundwork for adopting solutions that will enable UAB to collect data, analyze ESG goals and report on its green line. SAP believes that businesses of all sizes and across all industries need to adopt cloud solutions so they can take advantage of continued advances in artificial intelligence, sustainability data and automation.”
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