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 Türkiye) region, has announced the launch of an ESG-linked Supply Chain Finance (SCF) programme to advance sustainability in the aluminium giant’s supply chain
The innovative programme is a first for EGA and in the broader manufacturing sector in the UAE.
The programme will contribute towards improving the sustainability of the UAE aluminium sector by incentivising 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 payment early and is an increasingly popular way to manage working capital. EGA suppliers have accessed some US$1.5bn of supply chain financing through other EGA-facilitated programmes since the start of 2022.
Abdulnasser Bin Kalban, CEO of Emirates Global Aluminium, said, “The aluminium EGA produces plays a key role in the development of a more sustainable society worldwide. We recognise that it also matters how sustainably aluminium is made. This includes the production of the goods and services we need. Innovative financing mechanisms, such as the ESG-linked supply chain programme 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 programme 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 programme in the region to guide our clients in the transition towards a more environmental-friendly business framework. As we embrace the Year of Sustainability in the UAE, these efforts reaffirm our dedication to drive positive environmental change aligning 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 programme of due diligence and audits to verify sustainability performance, and works closely with critical suppliers to support continuous improvement.
EGA spends around US$1.7bn on goods and services each year from local UAE suppliers, accounting for 45% 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 300bn industrial growth strategy and ‘Make it in the Emirates’.