Emirates Global Aluminium (EGA), the paramount industrial firm in the United Arab Emirates (UAE) beyond oil and gas, and Emirates NBD, a distinguished banking group in the Middle East, North Africa and Türkiye (MENAT) region, have recently unveiled an ESG-linked Supply Chain Finance (SCF) programme. This groundbreaking initiative is engineered to propel sustainability within the behemoth aluminium producer’s supply chain, marking a significant milestone not only for EGA but also for the broader manufacturing sector within the UAE.
The SCF programme is meticulously designed to augment the sustainability ethos of the UAE’s aluminium industry. It aims to galvanize both existing and nascent suppliers to embrace and funnel investments into sustainable practices, avant-garde technologies, and materials resonating with EGA’s sustainability aspirations. Concurrently, it envisions fostering a demonstrable enhancement in the sustainability performance of these suppliers.
Abdulnasser Bin Kalban, Chief Executive Officer of Emirates Global Aluminium, emphasized the importance of sustainability in a press release.
“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.”
SCF is emerging as a preferred avenue for suppliers to secure early payment, thereby optimizing working capital management. Since the inception of 2022, suppliers under EGA’s ambit have leveraged approximately US$1.5 billion of supply chain financing through other programmes orchestrated by EGA.
Ahmed Al Qassim, Group Head of Wholesale Banking at Emirates NBD, said his firm is eager to working with EGA.
“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.”
Currently, EGA boasts a robust network of about 3,300 active suppliers dispersed not only within the UAE but globally. These suppliers are necessitated to adhere to EGA’s Responsible Sourcing Standard, encompassing stringent environmental, social, and governance metrics aligned with OECD principles and the Aluminium Stewardship Initiative’s Performance Standard. A rigorous regime of due diligence and audits undergirds the verification of sustainability performance, complemented by a close-knit collaboration with critical suppliers to spur continuous amelioration.
Annually, EGA channels around US$1.7 billion into procurement of goods and services from local UAE suppliers, constituting 45 per cent of the firm’s total global procurement expenditure. Under the aegis of the UAE’s Operation 300bn industrial growth strategy and ‘Make it in the Emirates’ campaign, EGA is ardently endeavoring to expand its local supply chain, thereby contributing significantly towards the nation’s industrial augmentation and sustainable development goals.
