How the GCC central banks compare on climate risk and sustainable finance, UAE, Qatar, Bahrain, Saudi Arabia, Oman and Kuwait, and what it means for regional banks.
Part of the reading list: Climate risk and banking regulation
Updated 20 October 2026: corrected the position of every central bank against the instruments in force, including Oman’s and Kuwait’s binding circulars, Qatar’s IFRS S1 and S2 mandate for banks and insurers, and SAMA’s empty Rulebook.
Introduction
A bank operating across the Gulf faces a question with no single answer: what does my regulator expect on climate? Because there is not one regulator, but six, and the GCC central banks are moving on climate risk and sustainable finance at different speeds and in different forms. This article compares them, and draws out what the patchwork means for regional financial institutions. It complements the wider GCC sustainable-finance map and our guide to ESG disclosure rules in the GCC, country by country, which covers listed companies.
The comparison
| Jurisdiction | Climate-risk / sustainable-finance position |
|---|---|
| UAE | CBUAE Climate-related Financial Risk Management Regulation (Circular C 8/2025, issued 14 Oct 2025): binding risk management, no public disclosure duty. SFWG principles are guidance. Separate ADGM and DIFC regimes |
| Qatar | QCB Sustainability Reporting Framework: IFRS S1 and S2 for all banks and insurers from FY2026. Sustainable Finance Framework (2025), binding on banks. No climate risk management regulation yet |
| Bahrain | CBB 2021 circular and March 2022 Guidance Note on climate risk: guidance only. The CBB ESG Module (Rulebook Common Volume, November 2023) separately requires an annual ESG report from listed companies and five licensee classes, banks included |
| Saudi Arabia | SAMA: nothing on climate risk in its Rulebook. Sustainable finance runs through the Ministry of Finance (Green Financing Framework) and the CMA (2025 guidelines for green, social, sustainability and sustainability-linked debt) |
| Oman | CBO Circular BM 1208 (October 2024), binding: governance, strategy and risk management requirements from 1 Jul 2026; annual public climate disclosure on FY2026 financial statements; semi-annual climate indicators to the CBO |
| Kuwait | CBK Circular 2/BS,IBS/500/2022 (16 Nov 2022): directives on sustainable finance and ESG, including climate risk in ICAAP and an annual sustainability report |
The shared direction is unmistakable; the pace and form are not yet harmonised. NGFS membership splits the same way: as at 26 August 2026 the CBUAE, ADGM FSRA, DFSA, SAMA, the CBB and the CBO are members, while Qatar Central Bank and the Central Bank of Kuwait are not.
Where each regulator stands
The UAE has the widest set of instruments, led by a binding risk management regulation, but C 8/2025 sets no public disclosure duty. Oman’s single circular covers the most ground: governance, strategy, risk management and annual public disclosure, all binding. Qatar leads on disclosure, applying IFRS S1 and S2 to every bank and insurer from FY2026, but has not yet issued a climate risk management regulation. Kuwait’s 2022 directives bring climate risk into ICAAP and ask for an annual sustainability report. Bahrain’s climate risk material is guidance, although its ESG Module makes an annual ESG report mandatory for banks. Saudi Arabia is the outlier: SAMA has nothing on climate risk in its Rulebook, and sustainable finance runs through the Ministry of Finance and the Capital Market Authority.
There is no single GCC climate-risk regime — there are six trajectories pointing the same way. Build for where they are heading, not just where each one is today.
Why the patchwork matters
The divergence is more than an academic point. A regional bank must satisfy binding risk management rules in the UAE and Oman, IFRS S1 and S2 disclosure in Qatar, annual climate disclosure in Oman, ICAAP directives in Kuwait, guidance in Bahrain and no central bank climate rule at all in Saudi Arabia, often for the same group, the same portfolios, the same data. Managing that as six separate projects is costly and inconsistent. Managing it as one capability, built to the leading standard, is both cheaper and more credible.
How ESGweise helps
ESGweise helps GCC banking groups navigate the multi-jurisdiction patchwork — building climate-risk and sustainable-finance capability to the highest common standard, and mapping it to each regulator’s specific expectations. See our strategy and reporting practices and our work with banking and financial services.
Conclusion
The GCC central banks are converging on climate risk and sustainable finance, but not in step. The UAE and Oman have binding risk management rules, Oman requires banks to publish climate disclosures, Qatar requires IFRS S1 and S2 reporting, Kuwait has 2022 directives, Bahrain has climate risk guidance, and SAMA has issued nothing on climate risk. For regional banks, the patchwork is a navigation challenge best met by building to the highest common standard. The destination is shared; the smart institutions are already heading there.
Related reading
Our companion guide covers the CBB ESG module in Bahrain.
Frequently asked questions
Do all GCC central banks regulate climate risk?
No. The CBUAE (Circular C 8/2025) and the Central Bank of Oman (Circular BM 1208) have binding climate risk rules, and Qatar Central Bank requires IFRS S1 and S2 disclosure from all banks and insurers from FY2026. The Central Bank of Kuwait issued directives in November 2022 that bring climate risk into ICAAP. The Central Bank of Bahrain has issued climate risk guidance only, and SAMA has published nothing on climate risk in its Rulebook.
Which GCC country is most advanced on sustainable finance regulation?
The UAE has the widest set of instruments: CBUAE Circular C 8/2025, the binding Climate-related Financial Risk Management Regulation issued on 14 October 2025, the Sustainable Finance Working Group principles (guidance), and the ADGM and DIFC regimes. On disclosure, Oman and Qatar go further. C 8/2025 sets no public disclosure duty, while the Central Bank of Oman requires banks to publish an annual climate disclosure and Qatar Central Bank requires IFRS S1 and S2 reporting.
What is Qatar Central Bank's sustainable finance position?
Qatar Central Bank has two binding instruments. Its Sustainable Finance Framework (2025) binds all banks operating in Qatar and governs sustainable and sustainability-linked lending. Its Sustainability Reporting Framework applies IFRS S1 and S2 to all banks and insurers from FY2026. QCB has not yet issued a climate risk management regulation; its 2024 ESG and sustainability strategy commits to one.
What does the GCC regulatory patchwork mean for regional banks?
Banks operating across several GCC markets must navigate several regimes at once: binding risk management rules in the UAE and Oman, IFRS S1 and S2 disclosure in Qatar, directives in Kuwait, guidance in Bahrain and no central bank climate rule in Saudi Arabia. The practical response is to build to the highest common standard (the UAE regulation for risk management and IFRS S1 and S2 for disclosure), which satisfies most jurisdictions and future-proofs against tightening rules.