ABU DHABI, The New York University Abu Dhabi (NYUAD) Transition Investment Lab (TIL) has marked its first year of activities by publishing its inaugural TIL Annual Report, which studies how sustainable investments can contribute to solving the most pressing socio-economic issues in Middle East, Africa, and Southern Asia (MEASA).
Established in April 2021, TIL is a new centre hosted by NYUAD devoted to studying sustainable finance. With the support of Mubadala Investment Company and Al Maskari Holding, TIL aims to fill the knowledge gaps preventing large-scale investment in delivering the United Nations Sustainable Development Goals (SDGs). The TIL Annual Report seeks to become a standard reference in the field.
The report noted that the MEASA has the world’s highest growth potential. Over the last decade, its GDP per capita has almost doubled in real terms, outpacing the growth of the rest of the world, while this century’s entire world population growth projected will originate from MEASA, yet it accounts only for 15 percent of global GDP.
This asymmetry is responsible for the “MEASA underweight” observed in financial markets, as global institutional investors allocate less than four percent of their listed assets to the region, with a share shrinking to less than one percent in private markets.
NYUAD Vice Chancellor Mariët Westermann said that the lab was established last year as a centre for research on sustainable finance, and promotes an understanding of investment strategies that apply an environmental, social, and governance lens.
TIL Executive Director Bernardo Bortolotti commented, “The inaugural TIL Annual Report clearly shows that the transition to a more sustainable economy requires investments targeted at areas with the highest growth potential, but at the same time facing the most severe socio-economic, and environmental challenges. We identify the MEASA as the target regions of choice due to the region’s demographic and economic growth prospects.”
Speaking of the potential for increased investments in the region, Bortolotti added, “Targeted ‘transition investment’ improves the fundamentals of emerging economies, mitigates global socio-economic and environmental risks, and ultimately boosts portfolio value of assets under management, aligning the interests of beneficiaries and society at large.”
Bortolotti also noted the role the UAE capital can play in leading the growth of transition investment. “Abu Dhabi, as a financial and logistics hub for the region, combined with its sovereign wealth fund community and with the support of ADGM and ADX as prominent financial enablers, is uniquely positioned to turn TIL aspiration into a reality.”
Source: Emirates News Agency