Global ESG sukuk market shows strong growth in early 2024; Q3 slowdown expected: Fitch

Global ESG sukuk market shows strong growth in early 2024; Q3 slowdown expected: Fitch
In the first half of this year, 99 percent of all Fitch-rated green sukuk were investment-grade, demonstrating strong credit quality in this segment. Shutterstock
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Updated 02 August 2024
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Global ESG sukuk market shows strong growth in early 2024; Q3 slowdown expected: Fitch

Global ESG sukuk market shows strong growth in early 2024; Q3 slowdown expected: Fitch
  • Market is predicted to regain momentum in the fourth quarter of 2024, Fitch said
  • In first half of 2024, 99% of all Fitch-rated green sukuk were investment-grade

RIYADH: The global environmental, social, and governance sukuk market saw significant growth in the first half of 2024 – rising 41 percent year-on-year to reach $43 billion, according to Fitch.

Data from the credit rating agency indicates that this growth underscores the increasing interest and dedication of governments and issuers to sustainable finance.

By the end of 2023, outstanding ESG sukuk expanded by 56.8 percent year-on-year to reach $36.1 billion globally, with 66.2 percent denominated in hard currency, primarily US dollars. 

The instrument, also known as green sukuk, is a Shariah-compliant financial tool in which issuers use the proceeds solely to finance investments in renewable energy or other environmental assets.

Market dynamics and forecasts

Despite the robust growth in the first half of this year, Fitch Ratings anticipated a slowdown in ESG sukuk issuance in the third quarter of 2024. This expected deceleration aligns with the typical seasonality observed in the global bonds environment. 

However, the market is predicted to regain momentum in the fourth quarter of 2024. 

“The medium-term growth potential for ESG debt issuance remains promising,” Fitch said. 

This optimism is underpinned by the increasing governmental commitments to sustainability and the efforts of issuers to meet green mandates and diversify their funding sources. 

Nevertheless, the adoption of ESG debt in emerging markets remains at a nascent stage compared to developed markets.

Fitch Ratings also forecasted lower oil prices, with predictions of $80 per barrel in 2024 and $70 per barrel in 2025. 

Additionally, expected interest rate cuts in the third quarter of 2024 could contribute to a rise in debt issuance, including green sukuk, over the final three months of 2024 and the first quarter of 2025.

Credit ratings and issuance trends

In the first half of this year, 99 percent of all Fitch-rated green sukuk were investment-grade, demonstrating strong credit quality in this segment. 

In 2023, 98.3 percent of those were investment-grade, reflecting strong credit quality, with a significant concentration in the Middle East and Asia.

During the first six months of 2024, Fitch rated approximately 90 percent of the global green sukuk issued in hard currency, totaling $26.1 billion, up 50 percent year-on-year. The majority of these originated from the Middle East, with 78.4 percent, followed by Asia, with 20.3 percent, and Europe, with 1.3 percent.

Saudi Arabia led in ESG sukuk issuance, accounting for 42.7 percent of the Fitch-rated bonds in this area, followed by the UAE at 33.8 percent.

Green bonds in Gulf Cooperation Council countries totaled $18.5 billion, representing 43 percent of the global ESG sukuk market.

By the end of 2023, despite a 4.6 percent decline in new issuance to $10.5 billion, the UAE led with 41 percent of this total, followed by Malaysia, Saudi Arabia, and Indonesia. 

Sector-specific developments and recent issuances

In core Islamic finance markets, such as the GCC countries, Malaysia, Indonesia, Turkiye, and Pakistan, ESG sukuk issuance rose by 13 percent year-on-year to reach $6.3 billion at the end of the first half of 2024. 

Conversely, non-Shariah compliant ESG bond issuance in these markets saw an annual decline of 34 percent to $7.8 billion, highlighting a shifting preference toward sukuk.

Notable recent issuances include a $600 million green sukuk by Indonesia, $750 million in financial certificates by Emirates Islamic Bank, and $1 billion of sustainable bonds by Al Rajhi Banking and Investment Corp. in Saudi Arabia. 

Pakistan is also planning to issue domestic green bonds by December 2024.

Regulatory developments

Regulatory frameworks and initiatives are playing a crucial role in supporting the growth of ESG sukuk. 

The Qatar Central Bank recently announced its sustainability strategy for the financial sector, and Saudi Arabia, Malaysia, UAE, and Oman have launched various frameworks and initiatives to foster the development of ESG sukuk and bonds.


Oil Updates — crude edges up on potential US tariff exemptions on cars 

Oil Updates — crude edges up on potential US tariff exemptions on cars 
Updated 6 sec ago
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Oil Updates — crude edges up on potential US tariff exemptions on cars 

Oil Updates — crude edges up on potential US tariff exemptions on cars 

SINGAPORE: Oil prices inched higher on Tuesday, supported by new tariff exemptions floated by US President Donald Trump and a rebound in China crude oil imports in anticipation of tighter Iranian supply, according to Reuters. 

Brent crude futures gained 25 cents, or 0.4 percent, to $65.13 per barrel by 9:30 am Saudi time, while US West Texas Intermediate crude was up 28 cents, or 0.5 percent, to $61.81. 

“Trump granted exemptions on electronic tariffs and signalled an auto tariff relief, both of which are seen as setbacks from the previously announced import levies, hence, providing some relief to risk assets, including oil,” said independent market analyst Tina Teng. 

“However, the rally in stocks and growth-sentiment commodities is sceptical, as his policy is unpredictable.” 

In the latest development in Trump’s whipsawing trade war, he said he was considering a modification to the 25 percent tariffs imposed on foreign auto and auto parts imports from Mexico, Canada and other places. 

The vacillating US trade policies have created uncertainty for global oil markets and pushed OPEC on Monday to lower its demand outlook for the first time since December. 

The Trump administration had announced on Friday that it would grant exclusions from tariffs on smartphones, computers and some other electronic goods, most of which are imported from China. That drove both oil benchmarks to settle up slightly higher on Monday. 

On Sunday, Trump said he would announce the tariff rate on imported semiconductors over the next week and a Monday Federal Register filing showed the administration had begun an investigation into imports of semiconductors on April 1. 

“The market is digesting fast-moving policy developments on the tariff front, while balancing them with nuclear talks between the US and Iran,” said ING analysts in a Tuesday note. 

“Clearly, the market is more focused on tariffs and what they mean for oil demand.” 

US Energy Secretary Chris Wright said on Friday the US could stop Iranian oil exports as part of Trump’s plan to pressure Tehran over its nuclear program. 

Also supporting prices were data on Monday showing that China’s crude oil imports in March were up nearly 5 percent from a year earlier, as arrivals of Iranian oil surged in anticipation of tighter US sanctions enforcement. 

Kazakhstan said on Monday that its oil output fell 3 percent in the first two weeks of April from the March average, confirming a Reuters report, although that still leaves its production above its OPEC+ quota. 


Al-Qasabi calls for Saudi-UK partnership to future-proof skills, jobs

Al-Qasabi calls for Saudi-UK partnership to future-proof skills, jobs
Updated 14 April 2025
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Al-Qasabi calls for Saudi-UK partnership to future-proof skills, jobs

Al-Qasabi calls for Saudi-UK partnership to future-proof skills, jobs

RIYADH: A Saudi-UK Center of Excellence should be established to help secure the future skill sets needed, according to the Kingdom’s minister of commerce.

During a panel discussion titled “Human Capital Reimagined – Launching the Saudi-UK Skills Initiative” on the second day of the Human Capability Initiative 2025 taking place in Riyadh, Majid Al-Qasabi explained that this initiative aligns with the UK’s reputation as a global center of excellence in education, home to top universities, leading research institutions, and world-class vocational schools.

Al-Qasabi speculated on future areas of collaboration: “We need to collaborate and cooperate and coordinate in three areas. Track A, we create a Saudi-UK Center of Excellence for future skills, where we can bring democrats like me, policymakers, private sector opinion leaders, educators, all the stakeholders to co-design future skills.”

He also shed light on additional areas where the two countries should collaborate, including vocational training and leveraging digital platforms.

“We know that the UK, they’re the center of excellence for vocational training, and we desperately need vocational training in Saudi Arabia. So, second track, we create the center of excellence or vocational academies, jointly UK-Saudi Vocational Academy, where your software, your brain power, your experience can be transferred to our boys and girls because this will also be used in the health sector and the newly developed sectors,” the minister said.

“Last, how can we leverage digital platforms to accelerate learning and continuous life learning because things are going too fast, so we create maybe a joined platforms to have continuous education even in the service sector. You know, the UK is the second largest exporter of services globally,” Al-Qasabi added.

He went on to note that the tourism, culture, sports, and creative industries are expected to create 1 million jobs by 2030. The creative economy alone already supports over 80,000 jobs, with strong growth anticipated in film and design, fashion, and digital arts.

“The digital economy is projected to grow from 4.4 percent of GDP in 2020 to over 19 percent by 2030. The health care sector is projected to reach SR250 billion ($66.6 billion) by 2030,” the minister said.

Al-Qasabi added: “The green economy expected over SR2 trillion worth of investments in the pipeline, like sustainable construction, renewable energy, circular economies, and so forth.”

He also emphasized that with 65 percent of the population under the age of 35, investing in lifelong learning is not a choice but a necessity.

Also speaking during the panel, the Kingdom’s Vice Minister of Sport, Bader Al-Kadi, noted that the National Sports Strategy was developed by drawing on insights from other markets, particularly the UK, which has been closely studied as a model for sports development.

“With that learning taken, we have worked on building capabilities in Saudis to ensure that we have the right talents. Not only as athletes, but as a physiotherapist, as psychiatrists, as sports managers, as coaches, and everything around building the ecosystem,” Al-Kadi said.

“We learn also from the UK sustainability in the sports sector. The UK sports sector is 90 percent funded by the private sector. That’s a great target, an ambitious to achieve. In Saudi Arabia today, 15 percent of the sports sector is funded by the private sector, so a big gap and a big ambition for us to work on toward achieving,” he added.

The minister also emphasized that human capability is one of the key enablers underpinning the National Sports Strategy and plays a central role in its development.

“The sports sector will contribute to 13 percent of those jobs that are being created by sports entertainment and tourism sectors,” Al-Kadi said.

“Obviously, sports (sector) is expected to also contribute to the economy. We aim to have sports reaching up to 3 percent of GDP by 2030. This is an ambitious target that we have for ourselves,” he added.

Also present in the same panel, UK’s Minister of Early Education Stephen Morgan underlined that the country wants to start by sharing their work with the Kingdom and, in turn, learn from the Ministry of Education’s initiatives to upskill and retain early-year staff.

“We could also share our experiences of introducing new modern teaching methods, and these include educational technology that tailors learning to individual children and produces data-led results to measure impact,” Morgan said.

He added: “And it’s through the sharing of our practice and resources and knowledge that early education can become a key building block in our partnership on skills training for older students and I have absolutely no doubt that the UK-Saudi Skills Education Partnership will be accessed with a success and we’ve already had notable achievements in our work together on education, such as increasing the number of UK independent schools in the Kingdom and we’re working really hard to deliver more important higher education partnerships for the future.”

Steve Field, UK special healthcare representative to Saudi Arabia, said: “You have a large number of nurses, majority of which are currently working very effectively in the hospital setup. You’ve got some brilliant hospitals, but to deliver the vision you will need to focus on prevention, on primary care and on mental health in addition to your hospital world and of course, if you can do that, you can move care out of hospitals, reduce the cost of healthcare, and also prevent illnesses before you have to treat them.”

He added: “So we’re here to help you. Our universities are really keen to partner with you to develop more nursing schools to support you in your faculty development, in your leadership, and we want to be on this journey with you and finally just to reassure and assure you that the UK government are right behind this and are with you right till the end and beyond.”

Mazen Fakeeh, president of Fakeeh Care Group, who also participated in the session, disclosed that the nursing shortage is a global issue, not just specific to Saudi Arabia.

“Nurses constitute 40 percent of the workforce required to provide care across the globe. Saudi Arabia, we have about. 6.2 nurses per 1,000 population. In Saudi Arabia, the current intake in nursing school is about 5,000 a year. For us to meet the gap, the existing gap and the future gap between 2030 to 2040, we need to increase that intake from the current 5,000 by 150 percent,” Fakeeh said.

He added: “So, there is a huge demand on nursing, nursing training and education. For that, the government had the initiative to reduce the number of years without compromising the quality of training from the current four years plus one year of internship to three years, which is the expedited nursing curriculum in the UK.”


London Business School to open Riyadh office amid rising demand for executive education

London Business School to open Riyadh office amid rising demand for executive education
Updated 57 min 6 sec ago
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London Business School to open Riyadh office amid rising demand for executive education

London Business School to open Riyadh office amid rising demand for executive education

RIYADH: London Business School is set to open an office in Riyadh in the coming months, a move its dean says reflects the institution’s long-term commitment to supporting Saudi Arabia’s Vision 2030 and the country’s accelerating demand for executive education.  

The new location will deliver tailored executive education programs for both public and private sector organizations, building on London Business School’s expanding presence in the Kingdom. 

“Opening a third location is a big move for us, and we are making this investment because we strongly believe in the future of Vision 2030,” said Sergei Guriev, dean of London Business School, in an interview with Arab News on the sidelines of the Human Capability Initiative in Riyadh. 

“We want to be part of this transformation, and we want to help enhance human capability of Saudi public and private sector organizations through providing leadership and business skills,” he added. 

The expansion will mark the school’s third global location and its second in the Middle East after Dubai. It will be managed by Florin Vasvari, appointed executive dean of executive education, Middle East, and Helen Kerkentzes, associate dean of executive education, who will serve as general manager. 

“We’ve grown our relationships with Saudi public and private sector organizations a lot. We have many Saudi students coming to our campuses in London and Dubai, but we also teach programs for Saudi corporations as well as, public sector organizations in London and in Riyadh,” Guriev said. 

He explained the school runs both open-enrollment and custom-designed programs to meet the needs of Saudi companies. 

“Open executive education programs are when students can apply from all sectors of Saudi economies,” he said. “But we also design custom customer-centric programs for Saudi corporations.” 

In recent years, the number of Saudi executives enrolling in open-enrollment Executive Education programs has surged by over 250 percent. 

Guriev noted that nearly one-third of LBS’s global executive education clients are either Saudi individuals or companies. 

“For us, Saudi Arabia is the biggest country for our executive education,” he said. 

The Kingdom has also become the top source of students at the school’s Dubai campus. 

“Saudi nationals are the biggest national group and account in the last intake, they account for about 40 percent of the student body in Dubai, in our executive MBA program in Dubai,” Guriev noted. 

He said the decision to open an office in Riyadh was part of a broader strategic move backed by the school’s leadership.  

“When I came on board as a dean, I talked to the board, the governing body of the London Business School. In November, we made the decision to proceed with opening an office,” he said. “In April, we stand on stage with three ministers, holding our commercial registration and investment license, allowing us to operate in Saudi Arabia.”  

On gender inclusion, Guriev praised the Kingdom’s progress and reaffirmed LBS’s commitment to advancing female leadership. 

“We drastically increase the participation of women in our programs in Saudi Arabia and in London. For us it’s very important and we praise the focus of the government on increasing of economic activity of women,” he said. 

“This is one of the great successes of recent years of the Kingdom of Saudi Arabia. And we want to be part of the success, providing more programs for women, not only in London but here on the ground in Riyadh, making it easier for female business leaders to take programs from London Business School,” Guriev added.  


Nigeria embraces AI in education to equip youth for global economy

Nigeria embraces AI in education to equip youth for global economy
Updated 14 April 2025
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Nigeria embraces AI in education to equip youth for global economy

Nigeria embraces AI in education to equip youth for global economy

RIYADH: Nigeria is integrating artificial intelligence into its education system as part of a broader strategy to train its vast youth population for the global tech economy, according to Minister of State for Education Maruf Tunji Alausa.  

Speaking to Arab News on the sidelines of the Human Capability Initiative in Riyadh, Alausa said African nations must embrace AI in education while ensuring that students retain critical social skills. 

“The basic outcome was that we don’t have a choice now, AI has come to stay. We need to now use AI as part of our learning,” Alausa said. “Countries need to infuse AI to help augment and improve education delivery.” 

However, he cautioned against over-reliance on technology, warning that it must not erode children’s social skills. “We have to be sure that it doesn’t leave deficiencies in the skill set, in the social skills of our children,” he added.   

With over 60 percent of Africa’s 1.2 billion people under 30 — and Nigeria’s 220 million population being 70 percent youth — Alausa argued that the continent is uniquely positioned to supply skilled labor to aging economies like Europe, Japan, and the US. 

“Today, Nigeria has 65 million people between 15 and 29, with 5 million entering the workforce yearly,” he said. “We need to train this youthful population in tech skills — software development, cybersecurity, AI, cloud computing — so they can service companies worldwide while staying in Nigeria.”  

Nigeria has launched a digital training academy to upskill university graduates in high-demand tech fields, enabling them to earn online certifications and work remotely for international firms. Alausa urged other African nations to adopt similar models.   

During his visit to Saudi Arabia, Alausa toured several academic institutions alongside Education Minister Yousef Al-Benyan and praised the Kingdom’s dual-track approach to higher education. 

“Saudi Arabia has gotten it right,” he said. 

He also announced forthcoming collaborations between Nigeria and Saudi Arabia in education and skills development. 

“As we learn from Saudi Arabia, Saudi Arabia can also learn from us,” Alausa added.  

Held under the patronage of Crown Prince Mohammed bin Salman, the Human Capability Initiative convened more than 12,000 experts from over 100 countries to address the intersection of education, workforce transformation, and emerging technologies. 

This year’s theme, “Beyond Readiness,” focused on AI, inclusive development, and global equity in skills training.   

With Nigeria positioning itself as a hub for global tech talent, Alausa’s vision aligns with HCI’s goal of fostering cross-border partnerships to future-proof economies.


Saudi Arabia launches National Skills Platform to future-proof workforce

Saudi Arabia launches National Skills Platform to future-proof workforce
Updated 14 April 2025
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Saudi Arabia launches National Skills Platform to future-proof workforce

Saudi Arabia launches National Skills Platform to future-proof workforce

RIYADH: Saudi Arabia has launched a National Skills Platform to equip its workforce with future-ready capabilities and align national talent with global trends, according to a top official.

The Minister of Human Resources and Social Development Ahmed Al-Rajhi made the announcement during his keynote speech at the Human Capabilities Initiative, where he described human capital as “the defining variable of global prosperity.”

He highlighted the Kingdom’s commitment to using advanced technology, specifically artificial intelligence, to modernize and improve its training and workforce development systems.

“We are proud to take another step forward and announce a new initiative, the National Skills Platform, designed ... to empower our workforce and strengthen our national talent base with essential skills for the future,” Al-Rajhi said.

He added: “The platform represents a milestone in our journey that offers a unique and simple, agile journey, ensuring that every employee is equipped to meet the changing requirements of the labor market.”

By leveraging AI, the government aims to create smarter, more efficient training pathways tailored to individuals’ needs and aligned with the demands of local and global labor markets.

“This is part of our responsibility in providing accessible, high-quality training opportunities for all to drive personal growth and national development,” said Al-Rajhi.

The initiative is part of a broader strategy to address global labor shifts driven by AI and automation.

“By 2030, over 92 million jobs will become obsolete as automation and artificial intelligence change the way industries and people operate,” Al-Rajhi stated.

He added: “At the same time, entirely new industries and roles are emerging at an expected rate. The global skills gap is widening, with nearly 40 percent of skills expected to change and 63 percent of their employers already identifying their biggest challenge in finding qualified talent.”

He pointed to specific challenges in the technology sector, particularly in global cybersecurity, which alone faces a talent gap of 3.4 million workers. AI-related roles also remain largely unfilled, with a 50 percent hiring gap.

In response, the Kingdom has adopted a demand-driven workforce strategy.

“We have set up 13 sector skill councils consisting of over 240 million members from public and private sectors. These councils are responsible for identifying skills and job requirements and how to address them,” Al-Rajhi said.

In partnership with the Human Capability Development Program, Saudi Arabia launched the Skills Accelerator Initiative in March 2023 to train more than 300,000 individuals “with expertise in high-growth sectors such as energy, healthcare, finance, and retail.”

A parallel track aimed at women’s employment exceeded its initial target by 22 percent, with a reported 92 percent retention rate among trainees.

Reflecting on the initiative, Al-Rajhi said: “We do this by analyzing what the market needs in collaboration with businesses, educational institutions and experts, then we give access to this training to every individual possible, regardless of their location, by blending virtual learning with hands-on training.” 

He continued: “Technical expertise alone is not enough. Leadership, strategic thinking, and adaptability are equally important, and skilling and reskilling for the workforce is a national priority that all stakeholders should engage in.”

The minister also highlighted the Waad National Training Campaign, describing it as an investment in “the promise of human potential.”

Launched in March 2023, Waad delivered over 1 million training opportunities in its first phase. A second phase was introduced in November, aiming to reach 3 million opportunities with support from 16 public and private sector partners.

The initiatives are supported by a growing network of more than 70 training institutions and over 45,000 businesses.

Expanding beyond national borders, Al-Rajhi announced the government has extended its Talent Enrichment Program globally through the Professional Accreditation Program that is enabling professionals in 160 countries to gain globally recognized credentials.

He added: “Our aim is to enhance global workforce mobility and competitiveness with over 1,300 accredited professionals. This initiative recognizes globalization, and it is a demand for global talent development and integration.”

In another announcement during the forum, Saudi Arabia revealed that the National Occupational Safety and Health Institute will be launched during the 7th International Conference on Occupational Safety and Health.

The institute, a partnership between the Technical and Vocational Training Corp. and the National Council for Occupational Safety and Health, aims to train over 35,000 individuals in occupational safety, health, and risk management within five years.

Khalid Al-Sabti, advisor of the General Secretariat of the Council of Ministers and chairman of the Education and Training Evaluation Commission. Screenshot

In a panel session, Khalid Al-Sabti, advisor of the General Secretariat of the Council of Ministers and chairman of the Education and Training Evaluation Commission, emphasized the impact of education quality on economic growth.

“At ETEC, our vision is to become a globally leading and high-impact Saudi model for equality and contribute directly to the national development and economic prosperity,” Al-Sabti said.

He continued: “We partnered with international global organizations to study the impact of education quality to economic growth, and currently, we are finalizing a study with the World Bank, and the findings are very encouraging and promising.”

He stated that if Saudi Arabia improves the quality of its education system to match or exceed global standards, it could see significant improvements in its economic growth, particularly in its annual gross domestic product.

In the past, the emphasis was largely on the number of years students spent in school, based on the assumption that more schooling would lead to stronger economies.

“Traditionally, education, measured by … the years of schooling has been seen as a major driver for economic growth. However, recently, studies show that there is a shift from the education quantity to education quality,” Al-Rajhi said.

He added: “Cognitive skills measured by international exams such as PISA (Program for International Student Assessment) has shown that it’s more important and critical for driving economic growth compared to simply years spent in the school.”