Emirates Global Aluminium, the largest industrial company in the United Arab Emirates outside oil and gas, and Emirates NBD, a leading banking group in the MENAT (Middle East, North Africa and Turkey) region, today announced the launch of an ESG-linked Supply Chain Finance (SCF) program to advance sustainability in the aluminum giant’s supply chain.
The innovative program is a first for EGA and for the broader manufacturing sector in the UAE. The program will contribute towards improving the sustainability of the UAE aluminum sector by incentivizing existing and new suppliers to adopt and invest in sustainable practices, technologies and materials that are aligned with EGA’s sustainability goals and demonstrably improve their own sustainability performance. Supply chain financing enables suppliers to access payments early and is an increasingly popular way to manage working capital. EGA suppliers have accessed some USD 1.5 billion of supply chain financing through other EGA-facilitated programs since the start of 2022.
Abdulnasser Bin Kalban, Chief Executive Officer of Emirates Global Aluminium, said: “The aluminum EGA produces plays a key role in the development of a more sustainable society worldwide. We recognize that it also matters how sustainably aluminum is made. This includes the production of the goods and services we need. Innovative financing mechanisms, such as the ESG-linked supply chain program with Emirates NBD, are an important way for us to accelerate sustainability progress by our suppliers.”
Ahmed Al Qassim, Group Head of Wholesale Banking at Emirates NBD, said: “We are pleased to partner with EGA to unveil a pioneering ESG-linked Supply Chain Finance program in the manufacturing sector. At Emirates NBD, we are committed to introducing new and innovative ESG-linked solutions for our clients and look forward to expanding the use of our Sustainable SCF program in the region to guide our clients in the transition towards a more environmentally friendly business framework. As we embrace the Year of Sustainability in the UAE, these efforts reaffirm our dedication to driving positive environmental change aligned with the nation’s ambitious Net Zero By 2050 Strategic Initiative. As the UAE prepares to host COP28, initiatives such as these will allow us to actively shape a more sustainable tomorrow for the MENAT region and beyond.”
EGA has some 3,300 active suppliers in the UAE and around the world. All are required to demonstrate compliance with the EGA’s Responsible Sourcing Standard, which details expectations on environmental, social and governance performance in line with OECD principles and the Aluminium Stewardship Initiative’s Performance Standard. EGA conducts a program of due diligence and audits to verify sustainability performance and works closely with critical suppliers to support continuous improvement.
EGA spends around USD 1.7 billion on goods and services each year from local UAE suppliers, accounting for 45 percent of the company’s total global procurement spend. EGA is actively working to grow its local supply chain further in line with the UAE’s Operation 300 billion industrial growth strategy and ‘Make it in the Emirates’.