FinTech

cooperation between Mashreq Bank and Fils to offset carbon from bank accounts

The Mashreq Bank, one of the leading financial institutions in the Middle East and North Africa, has announced the signing of a memorandum of understanding with the financial technology company “Fals”, based in the United Arab Emirates, aiming to develop offerings that enable companies to directly integrate carbon offset capabilities from their bank accounts with Mashreq.

“Fals” is a pioneering digital platform that meets institutional standards, providing the fundamental infrastructure for financial institutions, banks, and other companies in various industries to launch distinctive and sustainable products, such as carbon offset products.

This innovative approach facilitates the transition towards the future of financial technology, allowing companies to seamlessly integrate climate-friendly and sustainable practices into their business models and customer experiences.

In an effort to combat deceptive practices related to environmental responsibility, such as “greenwashing,” “Fals” utilizes blockchain technology to track all carbon balances used.

This aims to avoid double counting, ensure the highest levels of transparency, and prevent fraud.

The memorandum of understanding was signed at the global headquarters of Mashreq Bank by Nameer Khan,

the founder of “Fals,” and Joel de Vandesen, the Head of Corporate and Investment Banking at Mashreq Bank. The signing ceremony was attended and supported by Juma Al Keet, Chief Commercial Negotiator for the United Arab Emirates and Assistant Undersecretary for International Trade Affairs at the Ministry of Economy.

This memorandum marks the first step in Mashreq Bank’s efforts to develop specialized financial products for carbon offset, which will be launched in collaboration with selected companies in the UAE among Mashreq Bank’s clients.

This announcement is a significant milestone for the financial sector in the region, especially as stakeholders anticipate the introduction of the first solutions resulting from this collaboration in the first half of 2024, confirming the significant shift towards integrating environmental responsibility into financial practices in the area.

The importance of carbon balances is growing in the United Arab Emirates as an increasingly vital part of the carbon removal strategy. The partnership between Mashreq Bank and “Fals” will enable the creation of a bank account that addresses several historical challenges, including companies’ usual inability to directly access carbon trading markets.

The bank account will also address the usual minimum value problem for purchases, while “Fals” will provide segregated carbon balances.

This eliminates complexity, facilitates direct engagement with carbon credit markets, and simplifies the process of purchasing key indicators, enhancing the ability to audit and streamline reporting by Mashreq Bank.

Commenting on the memorandum of understanding, Joel de Vandesen, Head of Corporate and Investment Banking at Mashreq Bank, stated, “This initiative will have a broad impact on Mashreq Bank’s corporate clients, offering a solution capable of contributing to achieving environmental sustainability.

This initiative also reinforces the position of the UAE as a leading entity in integrating sustainability into the economic and financial sectors, in line with the country’s role in hosting the United Nations Climate Change Conference (COP28) and its ambition to lead global sustainability efforts.

Furthermore, this pioneering initiative clearly reflects Mashreq Bank’s efforts and commitment to sustainable practices.”

This announcement of the new carbon offset initiative in the UAE market adds a bright dimension to Mashreq Bank’s sustainable finance initiatives within the “Climb2Change” initiative, the widest global platform for environmental, social, and institutional governance by Mashreq Bank.

This international initiative integrates the bank’s extensive achievements in environmental, social, and institutional governance with its contribution to building a sustainable future and providing a financial solution that contributes to combating climate change and achieving a completely carbon-free future.

The new corporate offering from Mashreq Bank for carbon offset is a unique product that reflects the increasing use of carbon credits. 41% of global companies plan to use carbon credits to achieve their carbon reduction goals, and the carbon credit market is expected to grow at a compound annual growth rate of 30% in the coming years.

Namer Khan, the founder of “Fals,” stated, “Our partnership with Mashreq Bank to develop a pioneering carbon offset product is a strong incentive to enhance the application of environmental, social, and institutional governance standards across financial markets in the region.

These accounts have been established using cutting-edge technology to provide transparent key performance indicators, putting an end to greenwashing operations, and enhancing accountability and achievable results that can improve sustainability levels worldwide.”

The translation provided is a general interpretation of the content and may not capture all nuances of the original Arabic text.

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