The city of Dubai has a long tradition of contributing to charitable causes. Entrepreneurs and investors are growing interested in using crowdfunding platforms like Beehive and Eureeca to advance social projects. In March of 2022, the Cabinet of the UAE formally approved crowdfunding in the private and public sectors. Shortly after that, the government of Dubai initiated a program called DubaiNext to encourage the maturation of business ideas into fully-fledged companies. A significant number of these projects are founded on ESG, a relatively new term for corporate responsibility and sustainability that refers to environmental, social, and government activities. The Arab community has a long tradition of engaging in charitable giving to address problems facing societies worldwide.
At roughly the same time, Sheikh Hamdan bin Mohammed, the Crown Prince of Dubai, approved a venture capital fund of one hundred million dollars specifically for FinTech startups. The Executive Office stated in a tweet that the new fund would "consolidate the emirate's position as a global center for financial technology and innovation" and "promote the emirate's economic growth." Because of the fund, the economy will experience an increase of more than 8,000 new jobs. In addition, it is anticipated that the fund will contribute eight times as much to Dubai's GDP, making it possible for ESG initiatives to receive significant support from organizations such as Dubai Cares.
Two companies based in the Emirate of Dubai have earned a stellar reputation for their work as socially responsible investors. $The first company, Gulf Capital, has assets under management (AUM) of $2.5 billion, and the second, NBK Capital Partners, has an AUM of $1.1 billion. When evaluating potential investments, NBK considers both the welfare of the workforce and the company's social responsibility. When they make investments, NBK maintains a close relationship with those companies to ensure that the funded businesses in its portfolio continue to positively impact the workforce and community in which they are located.
ESG investing has been embraced by Gulf Capital, NBK Capital Partners, and Dubai Investment Fund (DIF), one of the world's largest global independent investment funds and asset managers. The company announced on July 20 that it would establish an ESG Investment Department. The newly established department will be in charge of locating and managing investment opportunities that can increase environmental and social impact, positive workplace culture, transparent accounting and decision-making processes, and the potential for financial gains.
The concept of ethical investment as a strategy for ensuring the continued viability of funds is gradually gaining traction across the industry. Eustace Osborn, Head of the newly established ESG Investment Department, reaffirmed the company's dedication to its social responsibility. "Investing in areas that will bring not only profit but also long-term benefits for the whole community is one of our main principles," he explained.
DIF understood long ago that such efforts were the right thing to do. In 2004, the company created a division dedicated to social projects. Mohammed Al Balushi was appointed Director of the Social Projects Department. Before he started working for DIF, he had more than ten years of experience in a position that was very similar to his current one. Since then, a substantial amount of effort has been devoted to improving the lives of those in need by integrating ESG into the company's larger mission to enable generational wealth. To identify social investment program opportunities beneficial to underserved communities, DIF brought together social studies, statistics, technological innovation, and problem-solving specialists. Back then, eighteen years ago, doing so was not a typical occurrence in the financial industry.
One of the earliest projects that DIF provided funding for was an initiative to improve the level of availability of both clean water and electrical power to the local population. This effort was undertaken in parallel with the work to make medicine and healthcare available to a broader population.
In 2005, GLANA WaterWise, a company in which the DIF provided funding equivalent to 25 percent of the company's required funds, evolved into a project of this kind. The execution of this project was founded on the fundamental principles of guaranteeing accessibility and efficiently using the world's water resources for every person living on the planet. Given the enormous work that went into putting this ambitious project into action, it has been held in high regard since its initiation. The project consisted of the following three stages:
- The prevention of the contamination of drinking water sources by sewage
- Provision of potable water and the purification of that water
- The maintenance and improvement of existing ecological systems.
Since then, DIF has made consistent progress toward establishing itself as a leadership and social impact legacy. In 2004, DIF invested in several noteworthy projects across the MENA region. These projects include "Education for All," "Helping Hand," and "Technology for Teaching."
The "Education for All" project's primary objective was to establish an elective curriculum in many schools in various geographic areas. Children older than 10 years old were eligible to enroll in classes that included in-depth instruction in foreign languages such as English and Chinese and education in information technology (IT), robotics, and the fundamentals of international relations.
Following the completion of a study in 2004, DIF made the decision to make an investment in the "Helping Hand" project. Consequently, as a result of the research, it was discovered that only about 5 percent of the young population in several African countries received an education beyond the primary level. The proportion of the population with some level of post-secondary education did not exceed 2 percent. The implementation of this project required the participation of educators drawn from some of the world's most prestigious schools and universities, who were tasked with instructing people of all ages.
Unlike previous projects, "Technology for Teaching" aimed to equip teachers and staff in South African schools with the modern equipment and technological infrastructure they require. This included computer classes, equipment for laboratories where students study biology and chemistry, and much more.
After growing its presence in the global market and the MENA region, DIF decided in 2005 to increase the size of its Department of Social Projects.
Today, DIF has a presence in 17 countries and has established a vast network of partners with which it collaborates to provide social investments worldwide. FINEMI, a FinTech company that supports underserved communities by democratizing access to financial services, received an investment of $90 million from DIF in 2005. FINEMI became one of DIF's key partners in subsequent years. A study that received a lot of attention revealed that small banks generally do not have a particularly positive attitude toward fintech startups and have taken a wait-and-see approach to fintech. Because of this, this partnership with FINEMI was to assist smaller banks in expanding their operations and competing more effectively with the dominant giants in the traditional financial industry. In 2007, following two years of collaboration, FINEMI was acquired and incorporated into the structure of DIF to facilitate further integration between corporate and institutional investors on the DIF digital platform.
Because it embraces a diversification strategy across its management infrastructure, portfolio holdings, geographical reach, investment methodology, and mission to drive the potential for generational wealth, DIF holds a truly singular position in the world of finance. DIF currently manages more than 320 billion dollars worth of assets from more than 7,300 private and institutional investors. DIF continues to improve its internal processes, analytical tools, talent, and long-term view by embracing new ways of thinking, diverse perspectives, and an unwavering commitment to social projects. This has been happening for twenty-one years since the organization was first established.
