SAB earns AA MSCI rating

Saudi Awwal Bank said on April 13 that MSCI raised its environmental, social and governance rating to AA, up from BBB in January 2024. (sab.com, msci.com) MSCI ranks companies on a letter scale from AAA to CCC and says the score measures how well a company manages industry-specific sustainability risks and opportunities relative to peers. Saudi Awwal Bank described the new AA score as the result of embedding environmental, social and governance factors into strategy, governance and risk management. (msci.com, x.com) The move marks a sharp change from early 2024, when the bank said MSCI had assigned it a BBB rating while Sustainalytics gave it a medium-risk score of 27.7. In that January 29, 2024 statement, the bank pointed to progress in human resources, governance, risk management and public disclosure. (sab.com) For banks, these ratings are used by pension funds, sovereign wealth funds and asset managers as one input in investment and portfolio decisions. MSCI says its ratings are designed to show resilience to long-term, financially relevant sustainability risks, not to certify a company as broadly “good” or “bad.” (msci.com) Saudi Awwal Bank has spent the past two years building out the structures that ratings firms typically examine. Its 2024 environmental, social and governance report lists board committees, management committees, an environmental, social and governance steering committee, an environmental, social and governance office, and a formal risk-management section devoted to environmental, social and governance risks. (sab.com) The bank also said its 2024 reporting aligns with frameworks including the Sustainability Accounting Standards Board, the International Sustainability Standards Board, International Financial Reporting Standards S1 and S2, and the United Nations Principles for Responsible Banking. Those standards matter because investors increasingly compare banks on common disclosure rules rather than standalone corporate claims. (sab.com) Saudi Awwal Bank is one of the Kingdom’s biggest lenders, reporting 454.5 billion Saudi riyals in total assets and 8.5 billion Saudi riyals in net income on its investor relations page. The bank was created through the 2019 merger of Saudi British Bank and Alawwal Bank, which SAB said formed Saudi Arabia’s third-largest bank by assets at the time. (sab.com, sab.com) Its latest annual report also shows SAB tying sustainability to business lines such as green loans, social loans, sustainability-linked loans and green trade finance. The same report lists “Best Bank for Environmental, Social and Governance in the Kingdom of Saudi Arabia” among its 2024 awards. (sab.com, sab.com) The AA rating does not place SAB at the top of MSCI’s scale, where AAA remains the highest mark. But it gives the bank a stronger talking point with global investors as Saudi lenders compete to show they can fund growth, meet tighter disclosure standards and align with the Kingdom’s Vision 2030 agenda. (msci.com, sab.com)