ESG at the core of TDF’s offerings
The Fund’s portfolio is intentionally designed to create long-term value by embedding sustainability into every funding decision.
At the core of its approach, TDF has defined impact areas that guide how it evaluates, structures, and manages its portfolio. By integrating these impact areas across its portfolio, the Fund ensures that its financial support delivers not only economic outcomes but also measurable environmental and social value that contribute towards its broader ESG strategic goals, reinforcing its commitment to building a more sustainable and inclusive tourism sector in the Kingdom.
Transitioning towards a Sustainable Economy
Green impact areas
- Green Buildings
- Renewable Energy
- Energy Efficiency
- Waste & Circular Economy
- Water Management
- Clean Transport
Improving Socio-economic Prosperity through Private Sector Contribution
Social impact areas
- Diversity & Inclusion
- Nationalisation
- Empowering Local Business
Unlocking Business Value of Tourism Eco-system
- Responsible Lending and Investing
ESG areas impacted: Green
- Climate Change & Carbon Emissions
- Energy Management & Efficiency
- Waste Management
- Water Conservation
ESG areas impacted: Social
- Diversity and Inclusion
- Nationalisation
- Empowering Local Business
Alignment with TTDI and EPI
TDF advances national sustainability goals by promoting low-emission infrastructure, renewable energy, and inclusive tourism development. Its green financing initiatives support climate change mitigation, energy efficiency, and waste management, aligning with EPI’s environmental health metrics. Simultaneously, the Fund’s efforts to enhance gender inclusion and increase tourism’s GDP contribution reinforce TTDI’s sustainability sub-index, positioning Saudi Arabia as a resilient and environmentally responsible tourism destination.
How TDF’s impact areas align with UN SDGs and regional agendas
TDF’s impact areas stem from its ESG strategic focus, which is aligned with Vision 2030 and the Saudi Green Initiative.
The Fund has carefully identified nine impact areas and aligned them with the relevant UN SDGs.
Aligning the Fund’s impact areas with the UN SDGs and regional agendas is vital, as it ensures that TDF’s initiatives not only contribute meaningfully to national priorities like Vision 2030 and the Saudi Green Initiative but also enhance the Fund’s effectiveness in addressing global sustainability challenges.
ESG integration is embedded at every stage of TDF’s funding process, from initial project screening and incentivisation to post funding and lending activities.
| Impact Areas | Description | SDG Alignment |
|---|---|---|
| Green Buildings | Designed to fund the construction of a green building that obtains a certification according to a third-party verified green building standard. | 91113 |
| Renewable Energy | Designed to fund a project committing to the usage of renewable energy to support the transition towards renewable energy adoption. | 1213 |
| Energy Efficiency | Designed to fund companies looking to implement energy efficient practices within their operations. | 1213 |
| Clean Transport | Designed to fund a project promoting green transportation. It offers incentives for projects committing to increase the usage of green vehicles. | 1113 |
| Water Management | Designed to fund projects/ companies that obtain a certification according to a third-party water management standard. | 6 |
| Waste and Circular Economy | Designed to fund projects/ companies that obtain a certification according to a third-party waste management standard. | 1112 |
| Diversity and Inclusion | Designed to fund a project/ company that promotes diversity and inclusion in the workplace. | 458 |
| Nationalisation | Designed to fund projects/initiatives that increase Localisation (Nationalisation) within a company. | 8 |
| Empowering Local Businesses | Designed to fund a project/ company that empowers local businesses and that support localisation and SMEs. | 48917 |
Project screening and incentives
TDF’s project screening process is a critical first step in ensuring that all tourism funding activities align with its sustainability and impact-driven mandates.
The Fund’s structured due diligence pathway, beginning with an initial evaluation of all applicants whether large enterprises or SMEs. Each project is assessed for ESG maturity and risk, followed by a tailored path based on entity size and program relevance. Projects are evaluated for alignment with environmental or social impact goals. If the proposed use of proceeds meets its green or social loan eligibility criteria, they advance to the respective sustainability assessments.
This also presents an opportunity for projects with lower ESG performance that currently do not meet the Fund’s criteria. TDF aims to support and uplift these projects by providing tailored impact plans that help improve their ESG maturity and long-term impact. Through this approach, the Fund not only advances projects with strong sustainability potential but also raises the overall ESG performance across its portfolio. This reinforces the Fund’s commitment to responsible tourism contributions and promotes greater awareness and accountability throughout the sector.
Across TDF’s portfolio, a robust incentives framework has been implemented, designed to re-ward investors for their ESG performance.
This initiative encourages the adoption of environmentally and socially responsible practices by aligning financial incentives with each project’s ESG maturity and commitment level.
The Fund aims to prioritise its support to SMEs in the tourism sector as part of its strategy, and therefore SMEs are eligible to receive higher incentives including additional incentives when operating in high potential cities.
Post Funding/Lending
Beyond initial funding, the Fund maintains a strong focus on post-contribution and post-lending stewardship due to which we are working towards establishing a framework which includes dynamic ESG risk management, annual ESG reviews, active engagement with beneficiaries, and monitoring mechanisms to promote transparency and accountability. For loan recipients, ongoing ESG assessments ensure continuous alignment with TDF’s sustainability goals.
Exclusionary Criteria
The Fund conducts due diligence on all financing to assess the environmental impacts of the project. Due to the regional nature of its business, the proceeds of any Sustainable Financing Transaction should be used within the Kingdom of Saudi Arabia with the purpose of supporting the tourism sector. TDF does not provide any financial services to clients whose business and projects are involved in the operations listed below, and therefore they will be ineligible for the use of proceeds of a Sustainable Financing Transaction.
Excluded Sectors
- Payday loans
- Gambling
- Adult Entertainment
- Alcohol
Excluded Projects
- Coal or gas fired power generation and distribution assets
- Coal mining and transportation
- Fossil fuel-related exploration and distribution
- Conflict Minerals
- Nuclear power generation and distribution assets
- Activities involving modern slavery, or forced labour
Continuous Improvement
TDF has invested in proprietary tools designed to assess both ESG risks, and the environmental and social impact potential of tourism projects. These tools enable the Fund to make more informed funding decisions and ensure alignment with its ESG strategy and national sustainability goals.
To support the effective use of these tools, the Fund has delivered comprehensive training to its relationship managers. These sessions equip its teams with the skills and knowledge needed to assess ESG factors and communicate their importance to its clients, fostering a deeper understanding and shared responsibility for sustainability across the investment landscape. Further, to support its relationship managers in advancing ESG integration in financial products, TDF has developed a Sustainable Financing Implementation Guide. The guide provides a comprehensive introduction to sustainable finance, outlines ESG integration across each step of the funding value chain, and serves as a go-to reference for the Fund’s sustainable financing approach and offerings
Looking ahead, the Fund aims to further embed ESG considerations into its core operations by developing a comprehensive sustainable financing framework. These efforts reflect TDF’s commitment to building internal capacity, strengthening ESG integration, and driving long-term, responsible growth in the tourism sector.
