The Middle East and North Africa (MENA region) are locations where this is more evident than in other parts of the world. Recent events worldwide have emphasised the need to address climate concerns head-on. The region is witnessing the increasingly apparent effects of climate change, exacerbating pre-existing vulnerabilities. Examples include record-breaking heat waves in Iraq and Kuwait, extraordinary wildfires in Algeria, and severe flooding in Libya.
At the same time, the area is facing increasing pressure to progress its sustainability initiatives. The region came under intense scrutiny during the United Nations Climate Change Conference in Dubai in 2023, also known as COP28, as international players and campaigners demanded an expedited period of climate action.
The region was successful in articulating a vision to lead this movement with the high-profile commitments made at the conference, including but not limited to the historic UAE Consensus of the COP28 Presidency to transition away from all fossil fuels in energy systems in a just, orderly, and equitable manner to reach net-zero emissions by 2050.
The private sector in the Middle East and North Africa (MENA) needs to step up and contribute to the shift towards more sustainable business models. However, to do so in a way that is truly sustainable, taking into account the social and economic context of the area, calls for a well-coordinated strategy that encompasses the whole value chain.
As climate change picks up speed, taking action is no longer just necessary to protect the environment; it is now essential to stay competitive in the global economy.
Today, corporations must report on their sustainability performance to satisfy regulatory requirements as well as the growing need for accountability and openness from stakeholders.
Sustainability is becoming a critical component of corporate strategy and global investment decisions. Country-level net-zero targets currently encompass over 90% of the world economy, and an increasing number of businesses include information about climate change in their annual reports or financial filings.
The private sector in MENA must be prepared to meet the pressure from international markets for businesses to reduce the carbon footprint of their products. For instance, starting in 2026, goods from non-EU nations will be subject to a carbon tariff under the EU’s Carbon Border Adjustment Mechanism.
This will probably have an impact on Egypt, Algeria, the United Arab Emirates, and Morocco because of their substantial exports of the targeted goods, which include cement, fertiliser, and aluminium.
Thus, to maintain their competitiveness in these international markets, MENA enterprises who wish to access global finance or cater to a worldwide clientele should likewise aim to enhance the sustainability of their reporting initiatives. Even with the drive, though, many businesses find it difficult to implement this because of budgetary limitations, unclear local regulations, and complicated worldwide reporting structures.
Industry executives believe that laws are still developing and frequently imprecise, even though several governments in the region have recently introduced large-scale sustainability policy initiatives. Strategic planning and sustainability initiatives become more difficult as a result of this ambiguity.
Governments in the MENA region can take the lead in creating frameworks and rules as well as offering incentives to early adopters.
Their leadership is essential for establishing guidelines and best practices, as well as for fostering an atmosphere that encourages sustainable business practices across sectors and industries to produce significant results.
Ambitious national strategies that incorporate waste management, environment conservation, and renewable energy ambitions are the UAE Energy Strategy 2050 and Saudi Arabia’s “Vision 2030.”
In addition, it is essential to move from conventional to creative solutions, and exchanging knowledge is essential to solving shared problems. Projects like the “Circular Economy Policy” in the United Arab Emirates, the “National Initiative for Smart Green Projects” in Egypt, and the Sustainability Champions initiative in Saudi Arabia demonstrate how cooperative efforts may effectively mobilise local solutions to improve all phases of the value chain.
Linking national activities throughout the area would be the next phase of this collaborative strategy. Companies in the MENA region would benefit from a unified approach to sustainability reporting standards that not only improves the region’s ability to meet the changing demands of environmental stewardship and economic transformation, but also helps to demystify complex issues and lay the foundation for long-term, sustainable climate action.
The World Economic Forum’s Leaders for a Sustainable MENA group will unveil new research next month to offer a path for businesses to navigate the complex sustainability landscape, to assist address these difficulties.
The results will also offer a conceptual foundation for preliminary attempts to create a regional reporting structure compliant with “International Sustainability Accounting Standards Board” guidelines but tailored to the local environment.
MENA firms have the opportunity to lead the way in ushering in a new era of sustainable economic growth and innovation that will benefit all parties involved by concentrating on important material challenges, encouraging collaboration between the public and private sectors, and embracing knowledge-sharing.