RIYADH: The National Bank of Bahrain, known as NBB, has ranked first in its environment, social, and governance performance across all sectors in the Arab world based on Refinitiv ESG scoring. The bank’s ESG score rose from 72 to 76 points in the third quarter, driven by NBB’s multiple initiatives aimed at ensuring responsible environmental practices, along with providing environmentally friendly products to its clients, according to a press release. According to the report, Refinitiv allocates ESG scores to companies on the basis of 10 main sustainability themes, based on publicly available data. An organization with a score above 75 is considered a firm with excellent relative ESG performance and a high degree of transparency in reporting material ESG data publicly, according to the Refinitiv website. Focusing on sustainability “Sustainability continues to play an essential role within our organization. NBB recognizes the significance of adopting sustainable methods that will lead to a positive impact both within our organization and our community,” said Jean-Christophe Durand, CEO of NBB. He added: “Our line-up of ESG-driven products and services have enabled us to assist our stakeholders in reducing their carbon footprint, and simultaneously add value to our community.” The high ESG score obtained by NBB is crucial as Bahrain set the net-zero target in 2060. “We are proud to have achieved the leading ESG score across all sectors in the Arab world. NBB’s tireless efforts have been recognized over the course of our sustainability journey, reflecting our collective efforts to engage sustainability across all levels from board members to employees,” said Dana Buheji, the bank’s group chief human resources and sustainability officer. In this year’s Euromoney Middle East Awards for Excellence, NBB was awarded as the ‘Best Bank for ESG in Bahrain’. NBB also received the ‘Best Bank for Sustainability Finance’ in Bahrain award and ‘Outstanding Leadership in Sustainability Transparency’ on a regional level from Global Finance’s Sustainable Finance Awards 2022. In September, NBB signed a memorandum of understanding with Honeywell to further enhance its sustainability footprint, according to a press release. With the deal, NBB aims to maximize its reach and offer more sustainability-focused financing plans to a larger number of customers, while supporting its existing client base with advice and financing, the press release added. ESG ratings should be used with caution: EFAMA Meanwhile, the European Fund and Asset Management Association, known as EFAMA, has put the ambiguity of ESG ratings under pressure, as it found a low correlation between different companies’ ratings. In its latest installment of the Market Insights series, the EFAMA analyzed the ESG ratings provided by Morningstar Direct and Refinitiv. It found that although there was a positive correlation between ratings from these two providers, “it is quite small” and investors should use the ESG scores “with caution.” “There is a positive correlation. However, that correlation appears to be quite small, as there are many funds with a very low Refinitiv score that have a high Morningstar score, and vice versa,” said EFAMA in a statement. EFAMA further noted that the results were not surprising as both agencies use different proprietary ESG assessment metrics to determine the scores.