Emirates NBD Transition Finance Framework expands access to transition finance in UAE

Emirates NBD Transition Finance Framework has been launched as the UAE’s first dedicated framework designed specifically to help corporate and institutional clients finance their shift towards lower-carbon business models.

The new framework establishes a structured methodology for identifying and assessing activities that could qualify for transition finance, particularly in industries where reducing emissions can be technically complex, capital-intensive or difficult to achieve in the short term.

The initiative covers a broad range of sectors, including manufacturing, mining, power and energy, real estate, transport and storage, agriculture and information technology.

By introducing dedicated criteria for transition finance, Emirates NBD aims to expand access to sustainability-focused capital for businesses that may not yet qualify under conventional green-finance definitions but are taking credible, measurable steps to reduce their environmental impact.

Emirates NBD Transition Finance Framework creates a pathway for companies

The Emirates NBD Transition Finance Framework is intended to provide greater clarity around which activities and investments may qualify for transition financing.

Unlike traditional green finance, which generally targets projects that already meet established environmental criteria, transition finance is designed for businesses that are moving towards lower-carbon operations over time.

This distinction is particularly important for companies in sectors where an immediate transition to fully green operations may not be technically or economically feasible.

Under the framework, financing can potentially support investments focused on reducing greenhouse gas emissions, improving energy efficiency, deploying cleaner technologies and developing lower-carbon business models.

The approach allows financial support to reach companies that are actively implementing credible transition strategies rather than restricting sustainable capital to activities that already satisfy the most stringent green-finance requirements.

For businesses, this can create a clearer financing pathway for investments required to modernise existing operations and reduce their carbon intensity.

Focus on hard-to-abate and high-emitting industries

A central element of the Emirates NBD Transition Finance Framework is its focus on sectors where decarbonisation presents significant challenges.

Manufacturing, mining, power and energy and transport are among industries that can face substantial technological and operational barriers when attempting to reduce emissions rapidly.

Real estate and agriculture can also require significant investment in energy efficiency, technology, infrastructure and operational improvements to lower their environmental impact.

The framework seeks to address these challenges by creating a dedicated mechanism for financing projects and activities that contribute to gradual decarbonisation.

For companies operating in these sectors, transition finance can provide funding for investments that may reduce emissions even if the underlying business or industry cannot yet be classified as fully green.

This could include upgrades to industrial equipment, improvements in energy performance, cleaner production processes, emissions-reduction technologies and other investments that contribute to measurable environmental improvements.

The inclusion of information technology also reflects the growing importance of digital technologies and technology-enabled solutions in improving resource efficiency and supporting the broader transition towards a lower-carbon economy.

Framework aligned with international guidance

Emirates NBD said the framework has been developed with reference to internationally recognised transition-finance guidance.

This includes the International Capital Market Association’s Climate Transition Finance Handbook, the ICMA Climate Transition Bond Guidelines 2025 and the Loan Market Association’s Guide to Transition Loan Finance 2025.

Referencing established international guidance is intended to create greater consistency in the assessment of transition activities and strengthen confidence that financing is directed towards credible transition efforts.

The framework also includes an independent assessment from DNV Assurance, which has been commissioned to provide a second-party opinion.

The assessment is intended to provide additional assurance regarding the framework’s methodology and its alignment with recognised transition-finance principles.

Such external assessment can be particularly relevant as transition finance grows and financial institutions seek to establish clear criteria for distinguishing genuine decarbonisation efforts from sustainability claims that lack measurable progress.

Expanding financing beyond traditional green projects

The launch highlights the growing role of transition finance as a complement to conventional sustainable and green financing.

Traditional green finance typically focuses on projects that already meet specific environmental thresholds. Transition finance addresses a different part of the market by helping businesses make the investments necessary to reach lower-carbon operating models.

For carbon-intensive industries, the shift towards cleaner operations can require substantial investment in equipment, technology, infrastructure and processes.

A company may therefore have a credible plan to reduce emissions without its existing operations being eligible for conventional green finance.

Transition finance can help bridge this gap.

Under the Emirates NBD framework, eligible activities may include investments in energy efficiency, emissions reduction, cleaner technologies and the development of lower-carbon business models.

This means financing can potentially be connected not only to individual environmental projects but also to wider corporate transformation.

The approach recognises that different sectors and companies will transition at different speeds, depending on available technology, infrastructure, capital requirements and the nature of their operations.

Emirates NBD targets $30 billion in sustainable and transition finance

The new framework forms part of Emirates NBD’s broader sustainable-finance strategy.

The bank has set a target of $30 billion in sustainable and transition finance by 2030.

The dedicated framework is expected to expand the range of activities that can be considered for transition-related financing as the bank works towards that target.

Emirates NBD said the framework will help channel capital towards areas associated with decarbonisation, industrial transformation and long-term resilience.

The strategy comes as businesses face increasing pressure to respond to changing environmental expectations, technological developments and the global shift towards lower-carbon economic models.

For financial institutions, this creates growing demand for financing structures that can support companies throughout their transition rather than only once they have already achieved a high level of environmental performance.

Supporting the UAE’s sustainable-finance ambitions

The initiative also contributes to wider sustainable-finance objectives within the UAE banking sector.

Emirates NBD said it is supporting the UAE Banking Federation’s ambition to reach Dh1 trillion in sustainable finance by 2030.

A dedicated transition-finance framework could broaden the number of businesses able to access sustainability-focused capital, particularly companies operating in sectors where emissions reductions require significant investment and longer implementation periods.

This is relevant to the UAE’s broader economic development strategy, as the country continues to invest in industrial capacity, infrastructure, technology and other strategic sectors while pursuing lower-carbon growth.

Transition finance can help businesses implement operational changes without requiring them to immediately move away from existing economic activities.

For companies, access to capital can be important for purchasing more efficient equipment, adopting cleaner technologies, improving production processes and developing new business models with lower emissions.

Vijay Bains highlights role in real-economy transition

Vijay Bains, Chief Sustainability Officer and Group Head of ESG at Emirates NBD, said the framework expands the bank’s existing sustainable-finance and sustainability-linked financing capabilities.

He highlighted its role in supporting the transition of the real economy across the UAE and the wider region.

The focus on the real economy is significant because many of the emissions reductions required to achieve long-term climate objectives will depend on changes within existing businesses and industries.

Rather than focusing exclusively on new green projects, transition finance can provide capital for companies seeking to change how they produce, transport, operate and consume energy.

For businesses with significant existing emissions, such investments can represent an important step towards more efficient and lower-carbon operations.

Creating greater consistency for clients and investors

Another important objective of the Emirates NBD Transition Finance Framework is to establish a more consistent approach to assessing transition activities.

Clear eligibility criteria can help corporate clients understand which investments may qualify for transition financing and what characteristics their projects or business activities need to demonstrate.

For investors and other stakeholders, a structured methodology can provide greater transparency around how transition-related activities are evaluated.

This is increasingly important as transition finance expands globally.

Without clear assessment criteria, there is a risk that projects could make broad sustainability claims without demonstrating meaningful or measurable progress.

By establishing a dedicated framework and referencing international guidance, Emirates NBD is seeking to create a more structured basis for evaluating transition activities.

Growing importance of transition finance in the UAE

The launch of the framework comes as financial institutions increasingly recognise that economy-wide decarbonisation will require more than conventional green financing.

Industries such as manufacturing, mining, energy, transport and real estate often require substantial capital expenditure to reduce emissions.

Companies may need to invest in new machinery, cleaner technologies, energy-efficiency measures, alternative production methods and improved infrastructure.

Transition finance provides an additional financing channel for these investments.

It also recognises that the transition towards lower-carbon operations is unlikely to happen at the same pace across every industry.

Some sectors have readily available low-carbon alternatives, while others face technological or economic limitations.

A dedicated transition-finance approach can therefore help direct capital towards credible activities while allowing businesses to progress towards longer-term environmental objectives.

Supporting long-term industrial transformation

The Emirates NBD Transition Finance Framework could play a role in supporting long-term industrial transformation across the UAE and the wider region.

Businesses often need to secure funding before they can achieve the performance levels required under conventional green-finance definitions.

Transition financing can help close this gap by supporting investments that demonstrate measurable progress towards lower-carbon operations.

For Emirates NBD, the framework adds another mechanism for working with corporate and institutional clients on their sustainability objectives.

Its $30 billion sustainable and transition finance target for 2030 also indicates the scale at which the bank intends to expand financing linked to sustainability and decarbonisation.

The capital supported through the framework could contribute to investments in cleaner technologies, improved energy efficiency, emissions reduction, industrial transformation and more resilient business models.

A new financing channel for the UAE’s transition economy

The launch of the Emirates NBD Transition Finance Framework represents an expansion of the UAE’s sustainable-finance landscape, particularly for industries that face greater challenges in reducing emissions.

By providing a structured methodology for assessing transition activities, Emirates NBD is seeking to create greater clarity for companies, investors and other stakeholders.

The framework also reflects an evolving understanding of sustainable finance. While green financing remains important, the transition towards a lower-carbon economy will require investment in businesses that are still in the process of changing their operations.

For companies in high-emitting and hard-to-abate sectors, access to transition finance could support investments that reduce energy consumption, lower greenhouse gas emissions, improve industrial efficiency and accelerate the adoption of cleaner technologies.

As businesses across the UAE and wider region continue to develop lower-carbon operating models, transition finance is likely to become an increasingly important source of capital.

Emirates NBD’s new framework provides a dedicated structure for that financing while supporting the bank’s wider sustainable-finance ambitions and its goal of directing $30 billion towards sustainable and transition finance by 2030.