Driving the Sustainability Agenda: UAE’s Vision and Efforts
Having clinched the presidency for COP 28, the UAE has always been proactive in conceptualizing and implementing sustainability practices. The UAE government has for a long time now, venturing into building the country’s non-oil economy. In 2020, the average share of GDP generated from oil rents in the United Arab Emirates decreased by 4.8 percentage points since 2019. In total, the average share declined to more than 11 percent in 2020.
A 2022 consumer behavior survey conducted across GCC is a testament to the growing interest in sustainability and environmentally friendly preferences amongst the customer base here. Based on data collected from more than 2,000 respondents in the three GCC countries, 81% of UAE customers concur that it is critical for businesses to operate responsibly. In a similar vein, 68% of respondents indicated they would be willing to pay extra for a product if the firm selling it used sustainable business methods. Consumers currently see corporate sustainability activities as being the most pertinent. This expanding trend emphasizes how urgent it is for companies to adopt sustainable practices.
Innovative Green Finance
Of all GCC countries, the UAE is showing the most momentum on this front. The Sustainable Finance Working Group (SFWG), which comprises all key regulators, the Central Bank of the UAE, the Securities and Commodities Authority, the Dubai Financial Services Authority, and the Abu Dhabi Global Market Financial Services Regulatory Authority, is one of many indications of the UAE’s ambition towards the growth of investment and sustainable financing by publishing a roadmap for building a sustainable finance framework in the UAE.
UAE’s First Abu Dhabi Bank is a member of the Glasgow Financial Alliance for Net Zero (GFANZ), a global coalition of leading financial institutions comprising more than 450 firms in the financial services sector across forty-five countries, representing more than $130 trillion of financial assets who have committed “to deliver the $100 trillion investment needed to achieve net zero over the next three decades.”
As part of its participation in the 27th UN Climate Change Conference (COP27), the UAE announced the release of its first Green Bond and Sukuk Program.
The UAE hotel industry has made commendable attempts to include green principles and sustainable practices in its offerings. Major worldwide hotel chains such as Accor, Mariott, Hilton, IHG, Radisson, Anantara, and Jumeirah have already implemented sustainable methods.The UAE became the first GCC country to join the Clean Energy Ministerial, an organization of the world’s 23 largest and most creative economies focusing on voluntary carbon reduction through clean energy deployment. The UAE is actively engaged in the construction of high-profile renewable energy projects utilizing world-class solar photovoltaic (PV) and concentrated solar power (CSP) technology.
The UAE Ministry of Industry and Advanced Technologies (MoIAT) and the corporate sector have recently launched the Industrial Sustainability Alliance to promote sustainable industrial growth via the use of green technology. This initiative is consistent with the Gulf country’s desire to strengthen its domestic manufacturing sector in accordance with sustainable principles and the utilization of innovative technologies.
The way forward
Sustainability is no longer an option for businesses. In reality, the financial and environmental gains are inextricably linked. Contributing to the circular economy allows assets to be reused and waste to be eliminated, from encouraging resource efficiency to enhancing cash flow and agility.
To embrace sustainability, organizations must establish a thorough framework that is tailored to their company objectives and simultaneously includes sustainability best practices. This covers crucial elements like establishing departmental climate policy, recruiting people to ensure compliance, and simply motivating staff members to recycle and use less energy.
Raising awareness of the SDGs is crucial for ensuring sustainability, both internally (among staff) and internationally (suppliers and peer organizations). It’s critical to share the actions and sustainability objectives you’ve established for your company. In an era of “greenwashing,” this not only lends sustainability efforts the much-needed legitimacy they require but also assists in forging a distinctive brand posture among your customers. Collaborations for organizational capacity building are strongly encouraged to speed up sustainability projects.
Measurement and Improvement
Any firm, regardless of size, may take efforts to enhance its ESG compliance. Establishing objectives for the usage of renewable energy, routinely assessing performance, and taking efforts to improve are critical for company sustainability adoption.
Based on the foregoing, the UAE is taking significant measures to combat climate change, meet its NDCs, and promote ESG compliance and sustainable growth in all areas. As a result, businesses must align themselves with sustainability objectives.
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