Sector-Level ESG Position Statement on Financing
Introduction
As part of its commitment to responsible banking, Qatar Islamic Bank (QIB) has developed sector-level position statements to complement its ESG Policy Framework. These statements provide guidance on how QIB addresses the unique environmental, social, and governance (ESG) risks and opportunities associated with financing in sensitive and high-impact sectors. They ensure that QIB’s financing activities are aligned with its values as a Shari’a-compliant institution, with the Qatar National Vision 2030, Qatar Central Bank’s ESG and Sustainability Strategy for the Financial Sector, and with international sustainability standards.
The position statements are not exclusions-only policies; rather, they set out QIB’s approach to responsible engagement and risk management, highlighting how the Bank applies its ESG Due Diligence Toolkit and ESG Risk Classification Matrix to systematically assess clients and transactions. By doing so, QIB ensures that sector financing decisions are consistent with both financial and sustainability objectives, and are subject to the same levels of scrutiny as other binding credit policies.
Sector-Level Position Statements
Certain sectors present particularly high ESG risks due to their environmental footprint, social impact, or exposure to transition pressures. To ensure these risks are appropriately managed, QIB has defined sector-level positions that guide financing decisions. These positions highlight how the ESG Due Diligence Toolkit and, where relevant, the IFC Performance Standards are applied to identify risks, set expectations for clients, and align financing with international best practices.
Agriculture
Agriculture plays a vital role in food security but is also linked to high environmental and social risks. These include water scarcity in arid regions, soil degradation, unsustainable land conversion, and biodiversity loss, as well as human rights concerns such as migrant labor conditions and fair wages.
Through the ESG Due Diligence Toolkit, QIB evaluates agricultural clients on water efficiency (e.g., irrigation methods), sustainable land use, avoidance of deforestation, biodiversity protection, and labor practices. For project-related transactions, assessments are aligned with IFC PS2 (Labor and Working Conditions), PS3 (Resource Efficiency and Pollution Prevention), and PS6 (Biodiversity Conservation and Sustainable Management of Living Natural Resources). These criteria are integrated into QIB’s credit policy framework and are subject to the same levels of scrutiny as other binding credit policies.
Biodiversity
Biodiversity loss is a cross-cutting risk across multiple sectors, from infrastructure to extractives. Projects may impact sensitive ecosystems, protected areas, and endangered species, which also create long-term legal, operational, and reputational risks.
QIB integrates biodiversity considerations into financing decisions through its ESG Due Diligence Toolkit. Any financing with material biodiversity impacts must demonstrate avoidance or mitigation measures and alignment with international best practice. Activities resulting in irreversible biodiversity loss are excluded. Project finance evaluations are benchmarked against IFC PS6 (Biodiversity Conservation and Sustainable Management of Living Natural Resources). Biodiversity considerations are embedded into QIB’s credit policy framework and reviewed with the same scrutiny as formal financing policies, while also drawing on external standards and conventions on biodiversity protection.
Energy Use
Energy consumption is a core driver of climate change and a source of transition and regulatory risks. Inefficient or carbon-intensive operations may expose clients to higher costs, stranded assets, and reputational pressure, while renewable and efficiency projects represent long-term opportunities.
Through the ESG Due Diligence Toolkit, QIB assesses corporate clients’ energy management systems, emissions performance, and alignment with Qatar’s national climate goals. The Bank prioritizes financing that supports renewable energy, energy efficiency, and clean technologies. Project finance reviews are guided by IFC PS3 (Resource Efficiency and Pollution Prevention). These assessments form part of QIB’s formal credit policies and are treated with the same oversight as other financing activities.
Mining
Mining contributes to economic development but is associated with some of the highest ESG risks. These include land disturbance, water contamination, tailings dam safety, occupational health and safety, community displacement, and social conflict. Improper management of these risks can result in severe reputational and financial consequences.
QIB uses its ESG Due Diligence Toolkit to evaluate mining clients for governance quality, environmental management systems, transparency in community relations, and land rehabilitation commitments. Financing decisions consider alignment with international mining and ESG standards. Project finance transactions are reviewed against IFC PS1 (Assessment and Management of Environmental and Social Risks), PS4 (Community Health, Safety, and Security), PS5 (Land Acquisition and Involuntary Resettlement), and PS6 (Biodiversity Conservation). All mining exposures are managed within QIB’s Credit & Investment Risk Policy and are subject to the same scrutiny as other binding financing policies.
Oil and Gas
Oil and gas remains an important part of the energy mix but also presents significant ESG risks. These include greenhouse gas emissions, local air and water pollution, community health and safety impacts, and growing exposure to transition risks as economies move toward decarbonization.
QIB applies its ESG Due Diligence Toolkit to oil and gas financing, with a focus on governance structures, environmental performance, and clients’ transition preparedness. Financing decisions emphasize operational risk management, respect for labor and community rights, and consideration of long-term sustainability strategies. Project finance reviews are guided by IFC PS1 (Environmental and Social Risk Management), PS3 (Resource Efficiency and Pollution Prevention), and PS4 (Community Health, Safety, and Security). This sector is reviewed within QIB’s formal credit framework and is aligned with recognized external standards for responsible finance.