UAE-based financial institution Mashreq has signed a Memorandum of Understanding (MoU) with Fils to launch corporate carbon offsetting services. Through this collaboration, the two companies plan to develop a corporate carbon offsetting service that supports corporate and institutional clients in including carbon offsetting directly from their Mashreq corporate accounts.

With its operations based in the UAE, Fils is a digital platform that offers the infrastructure for financial institutions, banks, and other organisations across industries to launch sustainable products. The company’s method focuses on assisting the transition to an Environmental, Social, and Corporate Governance (ESG) compliant corporate landscape. Fils aims to allow companies of all sizes to integrate sustainable and climate action into their business models and customer journeys across industries.

To remove the practice of misrepresenting environmental responsibility through greenwashing, the company’s infrastructure leverages blockchain technology to track carbon credits, with it being used to prevent double counting and offer transparency. Mashreq – Fils collaboration objectives and capabilities The agreement with Fils supports Mashreq’s development of specialised carbon-offsetting financial products, which the financial institution plans to launch in partnership with selected UAE-based corporate clients. As per the information detailed in the press release, the initial solution is projected to launch in the first half of 2024, with the announcement supporting the development of the region’s financial sector and underscoring the shift towards integrating environmental responsibility within financial practices. Furthermore, by working together, Mashreq and Fils aim to develop a solution that solves several historic issues, including the decreased accessibility of trading markets for corporates.

Additionally, the account intends to eliminate the problem of minimum purchase amounts that usually apply, with Fils providing fractionalised credits. This focuses on removing the complexity and availability of directly managing carbon credit markets and simplifies the purchasing, auditing, and reporting through Mashreq. According to Mashreq’s officials, the initiative is set to broadly impact the company’s corporate clients as it provides a solution developed to contribute to environmental sustainability. The collaboration with Fils also solidifies the UAE’s position in including sustainability in its economic and financial sectors, while also supporting Mashreq’s commitment to sustainable practices.

One of Mashreq’s objectives is to enable sustainability-related improvements in the financial sector in the fintech ecosystem. Representatives from Fils underlined that the collaboration with Mashreq assists the evolution of ESG enforcement across the UAE’s financial markets. Created with transparent KPIs, the accounts focus on eliminating greenwashing and supporting accountability and implementation of actionable outcomes that can enhance the sustainability of current markets.

The capabilities of the product in the UAE market merged with its strategic alignment with the region’s hosting of COP28 shows a progressive approach in the banking sector towards environmental responsibility. .