The Rise of Green Wall St.

The UAE plans to earn a healthy return on its $30 billion investment, but the opportunity is really much bigger. Alterra is the center of an emerging business cluster, much like venture capital in Silicon Valley or the entertainment industry in Hollywood. By tapping into the business of financing climate infrastructure in the Global South early, the country is placing a down payment for capturing a much bigger opportunity. Emerging markets represent the largest source of emissions reduction or prevention. And that means, sooner or later, significant capital must flow to make it happen. 

“The ecosystem is building here,” Al Suwaidi told me from his office, explaining that the Alterra fund has helped attract smaller climate-focused fund managers. Today, Abu Dhabi Global Market (ADGM), the city’s financial free zone where regulation is based on English common law, counts more than 170 local funds and other institutions that say they are focused on sustainability. Indeed, ADGM, Abu Dhabi’s Wall Street, has created an entire system to put wind in the sails of these efforts. The organization has crafted a comprehensive sustainable-finance regulatory framework that includes environmental standards for funds, portfolios, bonds, stocks, and other financial instruments linked to the environment. ESG disclosure standards are clear and simple. “We’ve been busy,” says Lawrence Paramasivam, who oversees the sustainability work at the Financial Services Regulatory Authority at ADGM. Paramasivam describes the regulatory approach as “part of a broader diversification strategy” for ADGM. The global reach and sway of the government in the UAE has helped open doors. The country is a bridge between north and south, east and west, with friendly relations with virtually every country. It follows that it can help navigate those financial flows too.