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Total green bond and sukuk issuances linked to sustainable activities reached US$5.5 billion in 2022 in Arab countries.

The rate of access of adults in the Arab region to formal financial services is 48 percent for males, 31 percent for women, and 32 percent for low-income groups.

Financial inclusion enhances the ability to adapt to climate change and recover from the effects of natural disasters

Improving the ability of the financial and banking sector to deal with climate-related shocks

Promoting awareness of the concept of the repercussions of climate change and issues of sustainable green financing

The issue of enhancing access to finance and financial services in Arab countries receives great attention from the Board of Governors of Central Banks and Arab Monetary Institutions, out of awareness of the great potential opportunities that can be achieved by enhancing financial inclusion to support comprehensive and sustainable economic development, confront the challenges of unemployment, and achieve social justice. There is no doubt that enhancing financial inclusion plays an important role in supporting efforts to confront the repercussions of climate change, by enabling financial sector clients to deal with the risks associated with climate change and enhancing their ability to recover from the effects of climate change, and this in turn contributes to comprehensive and sustainable development, and thus the safety and robustness of the financial sector. In this context, it is worth noting the need to adopt policies related to climate change within the framework of sustainability, in line with the 2030 Sustainable Development Goals of the United Nations and the guiding principles of the Paris Agreement, which is receiving increasing attention from the international community and regional and international financial institutions.

In recognition of this, the Council of Governors of Central Banks and Arab Monetary Institutions decided to commemorate the Arab Day for Financial Inclusion, which is held on April 27 of each year, under the slogan “Enhancing financial inclusion to support efforts to confront the repercussions of climate change" For the events of 2023. In this context, it is important that the financial and banking sector take the initiative to strengthen its ability to deal with climate-related shocks, enhance awareness of the concept of the repercussions of climate change, and deepen consumer confidence in financial institutions to reduce the negative effects of these changes in the Arab region. Central banks and Arab monetary institutions are keen to support the efforts of the international community in promoting financing that takes into account climate considerations and sustainable development in general. At the forefront is supporting the implementation of the sustainable development goals issued by the United Nations and their close relevance. With the topics of climate change, and supporting the efforts of the Group of Twenty (G20), which adopted the axis of financial inclusion as one of the main axes to support the goals of sustainable development and promote financial stability, as the G20 pays special attention to supporting the access of youth, women, and micro, small and medium enterprises to financial services, in addition to interest in community financial awareness and education, which enhances the chances of success of efforts and policies in this regard in a related context. It was one of the important priorities of the Twenty-seventh United Nations Climate Change Conference (COP27), which Held in Egypt, in securing the necessary financing to meet the requirements of climate goals, the participating countries are likely to discuss ways to accelerate and enhance global efforts to mitigate and adapt to the effects of climate change at the twenty-eighth conference (COP28) to be held in the United Arab Emirates. In the same context, the “Green Middle East Initiative” issued by the Kingdom of Saudi Arabia emphasizes commitment to international sustainability efforts by setting an ambitious road map with clear milestones that work to achieve all global targets.

Arab central banks are aware of the significant repercussions and challenges of climate change, as they seek to develop policies that support economic growth to adapt to the phenomenon of climate change. In a related context, Arab countries can work to develop and integrate applicable and sustainable country action plans that contribute to stimulating growth and building sustainable, inclusive and resilient green economies.

Within the framework of its strategy, the Arab Monetary Fund pays great attention to priority issues of financial sector development, especially in terms of confronting the repercussions of climate change and green and sustainable financing, with the aim of contributing to supporting efforts to achieve comprehensive and sustainable development and financial stability in Arab countries. In this regard, central banks and Arab monetary institutions have adopted the guiding principles issued by the Arab Monetary Fund on "How central banks deal with the repercussions of natural disasters and climate change on the banking system and financial stabilityThe Arab Monetary Fund also organized a number of high-level workshops and training courses, in addition to preparing studies and working papers in this field. In this context, the conference on “Supporting the transition to a circular carbon economy to achieve sustainable development"Organized by the Arab Monetary Fund, it supports the adoption of the environmentally sensitive circular carbon economy model as well as promoting sustainable economic growth by reducing carbon emissions. In a related context, according to estimates by the Arab Monetary Fund, Arab countries’ issuances of green bonds and sukuks linked to sustainable activities, whether sovereign or offered by the private sector, amounted to 5.5 billion US dollars in 2022.

In light of the increasing importance that has become acquired by the issues of climate change and its impact on the financial and banking sector, the Council appreciates the activities included in the Financial Inclusion Initiative for the Arab Region that focus on green finance and the role of financial and banking institutions in directing entrepreneurs to sustainable projects and investments, and the attention paid by partner institutions in the initiative to enhancing awareness of the concept of the repercussions of climate change, and encouraging products that take into account the environmental dimension and are climate-sensitive.

It is worth noting the interest of the Regional Working Group to Promote Financial Inclusion in Arab Countries in issues related to climate change and reducing their negative effects, through developing policies and procedures related to enhancing financial inclusion and improving its indicators, working to help Arab countries implement international standards and principles, and enhancing cooperation between various national institutions and bodies concerned with financial inclusion issues and between them and relevant international institutions. There is no doubt that there is a need to continue working on improving financial inclusion indicators, as World Bank statistics for 2021 indicate that the proportion of the adult male population in Arab countries who have access to formal financial and financial services has risen on average to 48 percent, 31 percent for women, and 32 percent for low-income groups. Despite the progress achieved, opportunities remain great, especially for financial and banking institutions, to improve access to financial services in Arab societies, target groups that are not financially included, and integrate the informal sector into the national economy through adopting appropriate policies. In this context, it is necessary to acknowledge the efforts of the Arab countries that have implemented the comprehensive model for statistical surveys in the field of financial inclusion, and to emphasize the importance of following up on its application in the rest of the countries, in a way that helps improve the quality of financial inclusion indicators according to the conditions of each country.

In the context of the continuing efforts made by central banks, commercial banks, and official Arab financial institutions in recent years, to commemorate the Arab Day for Financial Inclusion and the distinguished organization of activities and events on this day, which contributed to spreading awareness and financial education among all members of society, it is of great importance to enhance the revival of the activities of the Arab Day for Financial Inclusion and expand the scope of community participation in it, by implementing events and activities that work to enhance Knowledge In terms of the implications of climate change and sustainable green finance issues. Central banks and Arab monetary institutions also look forward to the participation of other supervisory authorities, most notably the ministries of finance, capital market authorities, insurance supervisory authorities, banking associations and all other financial institutions, in commemorating the activities of the Arab Financial Inclusion Day 2023.

On this occasion, His Excellency Dr. Abdul Rahman bin Abdullah Al-Humaidi, Director General and Chairman of the Board of Directors of the Arab Monetary Fund, stressed the importance and role of financial inclusion in confronting economic challenges that affect economic growth, by mobilizing resources to increase savings and investment rates and create new job opportunities, praising the increasing attention that issues related to enhancing financial inclusion have received from policy makers in Arab countries, which would help confront the challenges of poverty and unemployment and establish social justice. His Excellency also praised the efforts of the central banks and Arab monetary institutions, which are keen to continue giving the necessary importance to issues of improving financial inclusion and access to quality financial services at acceptable costs, and to give them appropriate importance and priority within the framework of the economic policies taken, and to enhance Awareness of climate change and its impact on financial stability, and applying responsible financing requirements, promoting green financial culture, supporting the green finance sector and green projects, and benefiting from modern financial technologies in providing financial services. Finally, His Excellency thanked the central banks, financial and banking institutions, and banking unions and associations in the Arab countries, for their efforts in launching activities on the occasion of the Arab Financial Inclusion Day, and the importance it represents in achieving the desired purpose of this occasion.