Emirates NBD's Bains: hard-to-abate sectors are the next test

Much of the easy emissions reduction of the past decade is over. Vijay Bains, group chief sustainability officer and head of ESG at Emirates NBD, told Environmental Finance that the next phase of net zero depends on a harder job: decarbonising the hard-to-abate industries that cannot simply swap in green assets. He calls this transition finance's defining era.

The list of problem sectors runs long: cement, steel, aviation, shipping, chemicals, aluminium, oil and gas, utilities and, increasingly, data centres. Bains's point is that net-zero pathways have to cover every part of the economy, and that means dedicating capital to decarbonising existing assets, not only building new green ones. In his formulation, the scope is deliberately wide — all finance counts.

Aviation is the example he reaches for. Aircraft have operating lives of 20 to 30 years, so the investment decisions being made today directly influence whether net-zero targets are met in 2050. A financing commitment signed this year does not end when the deal closes; it carries a 30-year environmental tail. That long horizon is what makes current lending decisions so consequential.

The pressure behind this is not just environmental. Bains points to energy security and geopolitical developments as forces that have sharpened the focus on a transition that is sustainable and just. Governments, regulators and central banks are reinforcing the direction through taxonomies, transition-planning requirements and broader climate policies. Banks are increasingly expected to embed transition planning into their own strategic and financial planning.

Bains's prescription starts with client engagement. Banks need to understand what clients are already doing, and he says he is consistently impressed by the innovation many clients are pursuing. The job is to identify where capital can genuinely accelerate decarbonisation rather than where it funds a report. He is explicit that transition finance should never be treated as a reporting exercise; it is support for long-term business strategy.

Then come frameworks. Publishing clear transition finance frameworks is essential, he said, and the market would benefit from greater harmonisation. Frameworks are a pragmatic way to support net-zero ambitions, and educating boards and executive teams on their value is increasingly important. This is an internal exercise as much as a market one: it puts transition finance in front of credit committees, not just sustainability departments.

On definitions, Bains draws the boundary tightly. Transition finance, he says, focuses specifically on helping high-emitting sectors decarbonise. That is narrower than a general green label, and it explains why frameworks matter. If the term covers all finance, it needs rules to mean anything.

The interview offers no numbers; Bains is focused on approach rather than arithmetic. His emphasis on harmonisation suggests the defining era will be spent writing the rules that make the label operational. Banks can point clients toward transition pathways, but the frameworks that define what qualifies are still taking shape.

Until those rules exist, transition finance risks being whatever any lender wants it to be. Bains's answer is not new technology; it is the discipline of clear frameworks and client-level engagement. For a bank lending to long-lived, high-emission assets, that discipline will determine whether the label describes a real shift in credit policy or just a phrase.