Sustainable Finance: From Ethical Choice to a Key Driver of Profitability in Global Markets

A worker cleans solar panels, a sustainable energy option that is gaining popularity among homes and farms for generating electricity (Reuters). 
A worker cleans solar panels, a sustainable energy option that is gaining popularity among homes and farms for generating electricity (Reuters). 
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Sustainable Finance: From Ethical Choice to a Key Driver of Profitability in Global Markets

A worker cleans solar panels, a sustainable energy option that is gaining popularity among homes and farms for generating electricity (Reuters). 
A worker cleans solar panels, a sustainable energy option that is gaining popularity among homes and farms for generating electricity (Reuters). 

As the world undergoes rapid economic and environmental transformations, sustainable finance has emerged as a central player in global markets, not merely as an ethical choice, but as a tangible investment opportunity with measurable returns.

Sustainable finance is defined as the integration of environmental, social, and governance (ESG) considerations into investment decisions, fostering long-term investments in sustainable economic activities and projects.

With the growing risks of climate change and heightened investor awareness of environmental and social responsibility, it is clear that ignoring sustainability standards is no longer a regulatory oversight, but a strategic mistake that could cost companies and investors dearly.

This reality raises fundamental questions about the relationship between profit and sustainability, and whether sustainable finance can truly balance financial performance with social responsibility.

Adopting Sustainable Practices

Mohammed Al-Faraj, Senior Head of Asset Management at Arbah Capital, stressed that sustainable finance has evolved from an ethics-driven choice reliant on corporate goodwill or government support into an effective investment tool and long-term profitability driver.

He explained that this shift stems from investors realizing that companies adopting sustainable practices are built on stronger, more stable foundations. The growing economic value of sustainability is now the primary driver behind corporate adoption.

Studies show that companies integrating sustainability standards attract top talent, build stronger brands, and reduce long-term operating costs through efficient resource and energy use. Over the past five years, sustainable finance instruments - such as green bonds and sustainable investment funds - have outperformed traditional ones. These funds also proved more resilient during economic crises, showing less volatility, reflecting sustainable companies’ stronger risk-management capabilities.

Al-Faraj noted that sustainable investment is less risky in the long term, as it accounts for factors often missed in traditional financial analysis, such as climate change, human rights risks, and corrupt governance. This approach acts as a “risk shield” by helping companies comply with increasing environmental and social regulations, avoid fines or penalties, and remain resilient to market shocks.

 

While the initial costs of sustainability may affect short-term competitiveness, they provide a lasting advantage over time. Al-Faraj concluded that sustainable finance is a natural evolution in investment philosophy, redefining the link between profit and responsibility, and guiding smart investors toward building wealth on solid, sustainable foundations in a risk-laden world.

 

Global Shifts

Financial and economic consultant Dr. Hussein Al-Attas echoed this view, saying sustainable finance is no longer merely an ethical stance or a marketing framework, but is now an investment option driven by pure economic logic. Amid climate shifts, global regulatory changes, and evolving investor behavior, market indicators in recent years have shown that companies and funds applying sustainability standards achieve better long-term financial performance with lower volatility and risk.

The consultant noted that while government support remains helpful, it is no longer the sole factor. Institutional investors, pension funds, and global asset managers are adopting sustainability strategies to achieve higher returns with reduced risk.

He continued that sustainable investment enables early regulatory compliance, reduces environmental damage that could lead to lawsuits or penalties, builds strong market reputations that boost customer and investor loyalty, and improves operational efficiency through innovation, energy efficiency, and resource management.

Al-Attas further emphasized that sustainability is no longer an operational burden but a strategic investment in corporate continuity and growth. He concluded that sustainable finance has become a prerequisite for profitability and success in global markets, and ignoring it could leave companies behind.

 

 

 



PIF Anchors State Street’s Newly Launched Saudi Equity ETF

Officials from PIF and State Street IM (Saudi PIF)
Officials from PIF and State Street IM (Saudi PIF)
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PIF Anchors State Street’s Newly Launched Saudi Equity ETF

Officials from PIF and State Street IM (Saudi PIF)
Officials from PIF and State Street IM (Saudi PIF)

The Saudi Public Investment Fund (PIF) and State Street Investment Management (State Street IM), one of the world’s largest asset managers, launched on Thursday the State Street Saudi Arabia Enhanced Active Equity (SAQL) with PIF as anchor investor.

The fund actively invests in equities of companies in Saudi Arabia using a quantitative multi-factor stock selection model, PIF said in a statement.

SAQL has its primary listing on the Xetra exchange in Germany and is cross listed on the LSE in the United Kingdom, where a bell ringing ceremony was held. The fund will be available to investors in both markets as well as investors across other key markets in Europe, the statement said.

The investment marks another step in PIF’s strategy to further deepen and diversify the Saudi capital market by attracting international capital flows, empowering financial institutions, broadening financing options for the private sector and introducing new products.

The newly launched fund is the second State Street IM ETF in which PIF has made an anchor investment, and the fifth ETF investment for PIF across nine global markets with leading international asset managers. New and innovative Saudi-focused products were listed in Hong Kong, London, Shanghai, Shenzhen, Tokyo, Frankfurt, Italy and Singapore.

“PIF is further strengthening Saudi Arabia’s capital market ecosystem, working with our partners to open gateways for international investors, enable access and drive global capital inflow into the country,” said Deputy Governor and Head of MENA Investments at PIF Yazeed Al-Humied.

“Our continued partnership with State Street IM reinforces a shared commitment to enhance and diversify the product range, to present new opportunities for international investors into the Saudi market and unlock capital pools,” he said.

“The launch of this ETF further deepens the Saudi market and builds on a series of PIF-anchored ETF listings across international markets, cementing PIF’s role in driving increased product diversification to enhance liquidity and fulfill market needs,” Al-Humied added.

Chief Executive Officer of State Street Investment Management Yie-Hsin Hung praised Saudi Arabia’s "success story," adding: “At State Street, as with PIF, innovation is in our DNA and we’re pleased to offer a new product in this same vein, drawing on our decades of experience and commitment to quality to underpin an exciting new offering, anchored by PIF.”

Quantitative funds, such as SAQL, use mathematical modeling, algorithmic, and data-driven methods to manage portfolios. The Saudi capital market has evolved beyond legacy sectors, with maturation of market structure and data quality – enabling SAQL to use a systematic active approach when investing in Saudi equity securities.

SAQL provides an opportunity for international investors to obtain investment exposure to this rapidly evolving economy.

The fund is registered for sale in Austria, Denmark, Finland, France, Germany, Ireland, Italy, Luxembourg, the Netherlands, Norway, Spain, Sweden and the UK.


Morocco’s Inflation Rises to 0.9% in March

 People stand looking across the river at the skyline in the coastal city of Rabat on April 20, 2026. (AFP)
People stand looking across the river at the skyline in the coastal city of Rabat on April 20, 2026. (AFP)
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Morocco’s Inflation Rises to 0.9% in March

 People stand looking across the river at the skyline in the coastal city of Rabat on April 20, 2026. (AFP)
People stand looking across the river at the skyline in the coastal city of Rabat on April 20, 2026. (AFP)

Morocco's annual inflation, measured by the consumer price index, rose to 0.9% in March from -0.6% a month earlier, the statistics agency said on Wednesday.

Food prices, ‌the main ‌driver of ‌inflation, ⁠rose 0.6% from a year ⁠earlier, while non-food inflation increased 1.1%.

Core inflation, which excludes more volatile goods, rose 0.6% year-on-year ⁠and 0.1% month-on-month.

The ‌rise ‌in fuel prices following ‌the Iran conflict ‌led the Moroccan government to reintroduce subsidies for professional transporters, including taxis, buses ‌and trucks, to keep prices stable.

Fuel subsidies, ⁠along ⁠with aid to keep electricity and cooking gas prices stable, would cost the government 1.6 billion dirhams ($170 million) monthly, the minister in charge of the budget, Fouzi Lekjaa, said.


Strait of Hormuz Blockade Drives up Costs at Panama Canal

Aerial view of the One Contribution container ship sailing under the Tokio flag as it enters the Panama Canal in Panama City on April 21, 2026. (EPA)
Aerial view of the One Contribution container ship sailing under the Tokio flag as it enters the Panama Canal in Panama City on April 21, 2026. (EPA)
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Strait of Hormuz Blockade Drives up Costs at Panama Canal

Aerial view of the One Contribution container ship sailing under the Tokio flag as it enters the Panama Canal in Panama City on April 21, 2026. (EPA)
Aerial view of the One Contribution container ship sailing under the Tokio flag as it enters the Panama Canal in Panama City on April 21, 2026. (EPA)

The war in the Middle East has boosted demand to move vital cargo through the Panama Canal to such an extent that one vessel carrying liquefied natural gas (LNG) paid $4 million to skip the line and avoid a wait that can take up to five days, according to an official report.

A surge in such payments has been recorded since the US-Israeli attacks on Iran began February 28, which led to the blockade of the Strait of Hormuz, a critical waterway for one-fifth of the world's oil and natural gas exports from Gulf countries.

To meet fuel demand, Asia's refineries are choosing to buy oil or gas from the United States and ship it through the transoceanic waterway instead of purchasing from Gulf countries who rely on the Strait of Hormuz, according to reports from the Panama Canal Authority.

The average number of ships passing through the canal on a daily basis has "remained strong," the authority told AFP in a statement Tuesday, with 34 ships in January and 37 ships in March. Some days exceeded 40 transits.

"The increase reflects changes in global trade patterns and market conditions, including geopolitical factors affecting key routes," the authority said.

Ships transiting the canal book their passage well in advance, and ships without bookings wait an average of five days to get through, but there is an auction where last-minute transits can be purchased.

The most recent auction included a $4 million bid for an LNG vessel, and in recent weeks two oil tankers exceeded bids of $3 million, the authority said.

Past average auction prices between October and February stood at around $130,000, and rose to $385,000 in March and April.

Five percent of global maritime trade passes through the Panama Canal, and its main users are the US and China. The route primarily connects the US East Coast with China, South Korea and Japan.

In the first half of the 2026 fiscal year, which runs October to September, the Panamanian waterway recorded passage of 6,288 ships, a year-on-year increase of 3.7 percent, according to official figures.