Environmental, Social, and Governance (ESG) principles are rapidly becoming central to how businesses operate and grow across the globe. Once seen as a Western-driven concept, ESG has firmly entered the mainstream of business strategy in the Middle East, reshaping how companies manage risk, attract investment, and maintain long-term sustainability.
What is ESG?
ESG refers to a set of standards used by investors and stakeholders to evaluate a company’s ethical impact and sustainability practices:
- Environmental criteria examine how a company performs as a steward of nature (e.g., carbon emissions, water usage, renewable energy).
- Social criteria consider how a company manages relationships with employees, suppliers, customers, and communities (e.g. labour standards, diversity, data privacy).
- Governance involves internal systems and practices (e.g. board diversity, executive pay, transparency, and anti-corruption).
Why ESG is gaining ground in the Middle East
There are several forces driving the ESG wave in the Middle East:
- Investor expectations: Global investors increasingly factor ESG performance into their decisions, pushing regional firms to comply to remain competitive.
- Regulatory pressure: Governments and stock exchanges—like the UAE’s ADX and Saudi Arabia’s Tadawul—have begun implementing ESG disclosure frameworks.
- Visionary agendas: National strategies like Saudi Vision 2030 and the UAE’s Net Zero 2050 initiative emphasize sustainability, green energy and inclusive growth.
- Global events: With the Middle East hosting high-profile events like COP28 (held in Dubai), the region is under global scrutiny to align with ESG priorities.
Leading the way: ESG front-runners in the region
Some companies and institutions have positioned themselves as ESG pioneers:
- ACWA Power (Saudi Arabia): A leader in renewable energy and desalination, ACWA Power is central to Saudi Arabia’s green transition.
- First Abu Dhabi Bank (FAB): FAB was the first MENA bank to issue a green bond and has been actively financing sustainable infrastructure and green initiatives.
- Majid Al Futtaim (UAE): The retail and real estate conglomerate has committed to becoming net positive in carbon and water by 2040, and publishes detailed sustainability reports annually.
- Qatar National Bank (QNB): The largest bank in the region by assets, QNB has made ESG a key pillar of its long-term strategy, focusing on green finance and governance reforms.
- Masdar (UAE): A global leader in renewable energy, Masdar continues to invest in wind and solar projects across Asia, Africa, and the Middle East.
No longer a “nice-to-have”
ESG in the Middle East is no longer a “nice-to-have”—it’s a business imperative. With increasing investor scrutiny, regulatory momentum, and global spotlight, companies across the region are taking significant steps to integrate ESG into their core operations. Those that lead now won’t just meet expectations—they’ll shape the future of sustainable development in the Middle East and beyond.
Diligencia helps customers from around the world to find essential information, including critical ESG insights, on organisations registered in Africa and the wider Middle East, drawing on primary sources that are otherwise hard to find. We can provide a deeper level of analysis to include a subject’s ethical profile and performance against environmental, social and governance benchmarks.