Saudi Arabia has emerged as the leader in sustainable sukuk issuances in the Gulf Cooperation Council (GCC) region in the first half of 2024, followed by the UAE, rating agency Moody’s said in a new report. 

 The  GCC countries accounted for 82% of global sustainable sukuk issuance in the first half of 2024, which rose 21% year-on-year to $6.8 billion.

Saudi Arabia topped the region with 42% of the issuances, followed by the UAE at 33%, the report said.  However, entities in the UAE were the most active in labelling their sukuk as “sustainable”.

Moody’s expected more private-sector financial institutions and companies to start issuing sustainable sukuk to attract a wider pool of investors.

 Several financial institutions in the GCC launched their first sustainable sukuk this year.

Dubai Islamic Bank issued $1 billion in sustainable sukuk in March, while Emirates Islamic Bank issued $750 million in sustainable sukuk in May. Qatar International Islamic Bank also tapped the market with $250 million of sustainable certificates in July.

From 2015 through mid-2024, Saudi Arabian entities issued the largest cumulative amount of sustainable sukuk, representing 33% of total volumes, followed by Malaysia and UAE with 21% each.

Meanwhile, Moody’s expects the governments of Saudi Arabia and Oman to issue their first sustainable sukuk in “the coming months”, driven by the recent introduction of sustainable finance frameworks.