As Jordan continues to navigate regional volatility and domestic economic constraints and fiscal pressure, sustainability has emerged not just as an environmental necessity, but a strategic economic imperative for long term national stability. Policymakers and financial institutions alike are increasingly embracing green practices as a means to drive growth, attract investment and secure long term resilience.
Jordan’s banking sector has taken active steps toward sustainable finance, aided by partnerships with international institutions like the International Finance Corporation (IFC) and the European Bank for Reconstruction and Development (EBRD).
These bodies provide: Green credit lines, ESG advisory services, capacity-building for climate risk management and standardized sustainability reporting frameworks.
According to recent estimates from international development partners, Jordan’s green transition could add up to 2 per cent to its annual GDP by 2030 if aligned with effective policies and private sector mobilisation.
Jordan’s natural resource scarcity, especially in water and energy, makes the case for sustainability uniquely urgent. But beyond risk mitigation, green growth strategies are becoming central to economic modernisation.
With more than 20 per cent of electricity generated from renewables, Jordan has positioned itself as a regional leader in clean energy. Scaling up green infrastructure projects can create jobs, reduce the import bill, and attract climate-aligned financing, besides saving the Central Bank of Jordan foreign currencies reserve and decreasing the dependency on the imported fuel.
Investments in desalination (like the National Water Carrier Project), wastewater treatment, and water network optimization are essential not only for survival but also for stimulating construction, innovation, and public-private partnerships in clean energy and waste- to- energy programs.
While collaboration with institutions like the IFC and EBRD ensures high standards and international alignment, overdependence on uniform tools and templates across all banks may stifle innovation and create a one size fits all mindset.
We can positively depend on international institutions’ expertise to accelerate adoption, higher investor confidence and create value added for small market players benefiting from knowledge transfer at low cost. On the other hand, negatively, it might hinder the competition, exclude small vendors and consultants and deprioritize some sectors and regions in Jordan.
So, it is better to apply a hybrid approach which encourages alignment on IFCEBRD tools with customized ESG strategies tailored according to the segments, client base and portfolio, taking the chance of high literacy rates which are around 98% in youth, plans for expansion in vocational training and minimizing the gender inequality in the labor force.
The future of sustainability in Jordan’s banking sector will depend on innovation, smart regulation, inclusive financing and local ownership. So, it is the responsibility of the local banks to train and build the green finance staff which will be capable of doing both credit and risk assessments of the green portfolio and building the corporate and SMEs strategies which will help the banks’ investors identifying the responsible borrowers and applying the required transparency.
Also, it is time to take a vital step to enhance Jordan’s position in the global sustainability by launching the ESG index on the Amman Stock Exchange, so it can help in assessing the companies’ commitment in Jordan’s ESG framework, integrating climate risk into public investment appraisals and scaling water energy nexus innovations.
Sustainability is no longer a luxury—it is Jordan’s most strategic economic lever. While global partnerships have jumpstarted the transformation, Jordan’s resilience will depend on how flexibly and inclusively its financial system adopts green principles. Balance, innovation, and local ownership will be key to turning today’s tools into tomorrow’s growth.
Faris Al Hadidi is an economist and banker