Majid Al Futtaim Green Sukuk Case Study

15 May 2019
Majid Al Futtaim Green Sukuk Case Study

In 2019, “climate emergency” was declared the word of the year. It was the year where climate change awareness and action sped up at a faster pace than before. Driven by a global social movement and accelerated by the global pandemic, governments and organisations worldwide stepped up their ambitions and committed to becoming net zero

As 2019 was a tipping point for sustainability, Majid Al Futtaim was listed as the world’s first benchmark corporate Green Sukuk and the first issued by a corporate in the region.

The region’s first corporate Green Sukuk valued at USD 600 million with a tenor of ten years. Green sukuk is financially similar to to Islamic bond, except that its proceeds can only be used to fund environmentally-friendly projects.

The green Sukuk is a testament to Majid Al Futtaim’s long-term commitment to support the transition to a low carbon economy. The investment is used to finance and refinance Majid Al Futtaim’s existing and future green projects, including green buildings, renewable energy, sustainable water management, and energy efficiency.

The sukuks falls in line with Majid Al Futtaim Net Positive strategy, launched in 2017. The strategy aimed to significantly reduce the company’s water consumption and carbon emissions to the extent that it puts more back into the environment than it takes out, resulting in a positive corporate footprint by 2040.

With the Green Sukuk listing, the value of all debt instruments listed on Nasdaq Dubai by Majid Al Futtaim has reached USD 2.4 billion. The company’s other listings comprise one Sukuk of USD 500 million listed in 2015, and two conventional bonds of USD 500 million each that listed in 2013 and 2014 respectively, and a USD 300 million taps on the 2014 bond that listed in 2016.

The total value of all Sukuk listed on Dubai’s exchanges has now reached USD 61.49 billion, the largest amount of any listing centre in the world.