The UAE’s Federal Climate Change Law, effective from 30 May 2025, and the Saudi Capital Market Authority’s (CMA) directive for ESG reporting are more than compliance requirements – they are the new battleground for business growth and brand dominance.

Regulatory shifts: what’s changing?

The UAE’s Federal Decree-Law No. 11 of 2024 is a game changer. It mandates that both public and private sector entities, including those in free zones, must measure, report and reduce carbon emissions. Companies are required to publish time-bound climate action plans, establish internal climate governance structures and align with national climate goals.

Meanwhile, the KSA CMA is planning to move from voluntary to mandatory ESG disclosures for listed companies. This directive aligns with global standards and aims to enhance transparency, investor confidence and long-term value creation. The anticipated shift to mandatory reporting signals a broader regional trend toward embedding sustainability into the core of corporate strategy.

Business impact: compliance and beyond

These regulations demand that businesses invest in ESG data infrastructure, including systems for emissions tracking, sustainability reporting, and third-party verification. Companies will need to upskill teams, engage with ESG consultants, and potentially restructure operations to meet new benchmarks.

But let’s be clear – this is not just a compliance burden. It’s a strategic opportunity. Businesses that proactively embrace these changes can differentiate themselves, attract impact investors, gain preferential access to green financing, diversify to new consumer segments and harness growth opportunities from a growing consumer sentiment that brands that do good are good brands.

And consumer sentiment towards social and environmental expectations on brands is steadily building. To help businesses navigate this evolving landscape, Kantar, the world’s leading data and analytics company, offers the Sustainability Sector Index report (SSI), that provides a robust understanding of consumer expectations on sustainability issues by sector across markets, enabling brands to strategically prioritise their focus and investment. In KSA, the SSI reveals that 79% of consumers believe that people like them need to do whatever they can to fight climate change. And 81% want to fight social inequality and injustice. This presents a significant opportunity for brands to align their strategies with these values.

Growth opportunities for brands

If businesses think about these regulatory shifts as more than just a compliance and risk reduction exercise, a world of opportunities and commercial gains opens up.

1. Access to capital. ESG-compliant firms are more attractive to institutional investors and sovereign wealth funds, many of which are aligning portfolios with ESG principles. Are you equipped to tap into this capital?

2. Public-private partnerships. Governments in both the UAE and KSA are offering incentives, grants, and carbon offset mechanisms to support climate-aligned business models. This creates fertile ground for collaboration and innovation. Are you ready to partner for progress?

3. Sustainable innovation. Brands that develop low-carbon products, circular economy models, or green technologies will be well-positioned to lead in a market increasingly driven by environmental performance. Are you ready to innovate or will you be left behind?

4. New market segments. The rise of green and socially conscious consumerism opens doors to new product lines – eco-friendly packaging, carbon-neutral services, and ethical sourcing are no longer niche but mainstream expectations. Is your brand ready to meet these consumer demands?

5. Reputation and trust. Transparent ESG reporting builds stakeholder trust. Companies that lead in sustainability can enhance brand equity, as consumer values are shifting. Is your brand ready to be a leader?

Visionary brand leaders

And there are already visionary brand leaders in the region that we can learn from.

Al Rajhi Bank, the most valuable brand in the 2024 Kantar BrandZ Most Valuable Emirati and Saudi Brands ranking, has leveraged its strong brand equity to integrate sustainability into its core operations. By focusing on sustainable finance and aligning with Vision 2030, the bank has enhanced its reputation and attracted sustainability-focused investors.

In response to the introduction of the sugar tax and VAT in KSA, PepsiCo has focused on sustainable product innovation and marketing strategies that resonate with health-conscious consumers. This approach has helped the brand regain market share and strengthen its position in the region.

As the fastest riser in the 2024 Kantar BrandZ Emirati and Saudi Brands rankings, Tawuniya has capitalised on the growing demand for sustainable insurance products. By offering eco-friendly insurance options and promoting sustainability initiatives, the company has enhanced its brand value and customer loyalty.

Using ESG commitments as a platform for brand growth

As the UAE and KSA position themselves as regional leaders in sustainability, businesses that act early will not only ensure compliance but also unlock competitive advantages. The shift toward mandatory ESG reporting is a clear signal – the future of business in the Gulf is green, transparent, and accountable.

For brands, this is a moment to lead – not just in meeting regulations, but in shaping sustainable brands and a more green, equitable and resilient economy. Are you ready to seize this opportunity?

Brands grow by being meaningfully different. Brands that are meaningfully different to more people command 5 times penetration today – and real advantage in penetration growth over time. Your brand perceptions on sustainability will either inspire or inhibit your brand growth. So how do you find your path to building Meaningful Difference on sustainability?

ESG strategies and internal sustainability commitments provide a foundation and a springboard. But brands can’t just take existing ESG initiatives and jump straight into brand communication or innovation, without connecting activation with consumer expectations, brand purpose and sector context – or efforts will fall flat.

Think of it like decorating a house without creating a solid structure. It may look good temporarily, but cracks will appear over time – and your audience will notice. Consumers today are savvy and they are fact checking brands. In fact, 50% of KSA consumers say they have seen, or heard, false or misleading information about sustainable actions taken by brands across sectors, affecting trust and consideration.

So, to reap commercial rewards, brands must bridge the gap between corporate level ESG commitments and brand level marketing activation, which starts by developing a sustainability-aligned brand strategy – a crucial step that too many businesses skip. This can be achieved through meaningfully different sustainable marketing.

What meaningfully different sustainable marketing looks like and how to get started

If your brand is ready to move from intention to action, here’s a roadmap to follow for meaningfully different sustainable marketing:

1. Start with ESG, but don’t stop there – use your existing corporate sustainability commitments as a starting point but recognise that not all issues and initiatives will be relevant to consumers.

2. Understand your sector – leverage validated data and insights from Kantar’s Sustainability Sector Index to evaluate consumer expectations, values and behaviours specific to your industry.

3. Know your brand – conduct an honest assessment of where your brand stands on environmental and social sustainability in consumers’ minds. Are you seen as part of the solution or part of the problem?

4. Build a sustainability-aligned brand strategy – this bridges the gap between ESG commitments and brand marketing, ensuring your efforts are credible and consumer-centric.

5. Activate Meaningful Difference – create communication, innovation, and experiences that resonate with consumer values and needs, backed by data and rooted in purpose.

6. Measure and iterate – track your progress with the right brand equity metrics and adjust your strategy as expectations and market dynamics evolve. 

In markets like the UAE and Saudi Arabia, where regulatory landscapes are shifting and consumer sustainability expectations are rising, the stakes are high. Brands that act with intention and insight can not only navigate these changes but turn them into a competitive edge. Ultimately, the path to sustainable brand growth isn’t about doing everything that’s in your ESG strategy – it’s about doing the right things, in the right way, for the right reasons. And that starts with listening to what consumers are really asking for.

This strategic expansion aligns with significant market opportunities, as the global retail sector is projected to grow from $28.3 billion in 2023 to $37.7 billion by 2027.

GMG and Nike, partners since 1982, continue to evolve their collaboration to meet the demands of today's digital shoppers. Responding to the surge in online shopping, GMG launched Nike.ae and Nike.sa, alongside the brand's first mobile app in the region, prioritising customer convenience. Earlier this year, GMG further expanded Nike's online presence by launching e-commerce platforms in Kuwait and Qatar, bringing the brand's premium experience to even more customers in the region.

Across the Middle East and Africa region, GMG continued to strengthen its presence in Saudi Arabia through its partnership with JD Sports, marking its first store opening at Riyadh Park Mall. Meanwhile, the company's Egyptian operations continue to flourish, with 26 stores across its retail portfolio and plans to reach 100 stores by 2026, supported by strategic partnerships with key local players.

GMG's Everyday Goods division achieved significant milestones in 2024, launching innovative products at both GULFOOD and SIAL Paris, where it made its European debut. The company introduced Shnax, a healthy snacking alternative made from 100% chicken, which earned an "Innovative Product" award nomination at SIAL.

GMG capped a highly growth-focused year with the launch of GMG Home, adding a new dimension to the company's retail portfolio. This division unifies Suncoast's premium outdoor furniture with Monoprix Maison's curated indoor collections, offering practical luxury for both outdoor and indoor living spaces. GMG's Health and Beauty division underwent a significant transformation this year with the rebranding of its Supercare pharmacy.

GMG launched its comprehensive CSR platform 'GMG Cares' in 2024, built around three key pillars: Planet, Community, and People. The platform's immediate impact was demonstrated through community initiatives providing over AED 70,000 worth of food staples to families in need and distributing 2,320 meals during Ramadan across the UAE, KSA, and Malaysia.

Additionally, this year, GMG reached a significant sustainability milestone with the publication of its inaugural Sustainability Report. The report highlights impressive progress, including a transition to 89% green energy usage in its logistics operations between 2022 and 2023. This shift resulted in a substantial reduction of the company's carbon footprint, avoiding over 2,000 tons of CO2 emissions.

Other ongoing environmental initiatives yielded significant results, including eliminating nearly 295,000 plastic bottles through a water station at Al Qudra cycle track as part of Dubai Can. Company-wide sustainability measures included replacing 35,000 square meters of plastic tape with paper alternatives and saving over 415,000 plastic bottles through water filter installations in the office.

In workplace empowerment, GMG introduced its Diversity, Equity & Inclusion (DE&I) committee and launched the "EmpowHer" program to advance women's career opportunities. The company also established the GMG Sports Club and partnered with Al Noor Special Needs Centre to support employment opportunities for people of determination.

Some of 2024's impressive results include the Nike membership program, which generated 75% of revenue through member sales in its first month. The company's logistics infrastructure saw significant optimisation through AI implementation at its 23,070-square-meter mega-warehouse in Riyadh, enabling delivery times of 12-24 hours to major cities while reducing fleet size by 7%.

By partnering with Ad Net Zero, the ABG aims to help the advertising industry contribute to the UAE's net-zero goals and promote responsible consumption and production. The launch of the chapter will serve as the regional hub for MENA and is a decisive move toward shaping a more sustainable future for the advertising industry in the region.

Ad Net Zero is set to launch in the UAE with its founding supporters Google, META, Unilever, Group M, MCN, Dentsu, Publicis Groupe, and Omnicom Media Group, all taking the lead in sustainable leadership and adding to the wider list of ANZ global supporters. This commitment underscores the industry's dedication to pioneering responsible advertising standards and shaping a sustainable future.

Commenting on the milestone Khaled AlShehhi, Executive Director of Marketing and Communication, UAE Government Media Office, stated, "With 2023 and 2024 declared as the Years of Sustainability by the UAE President, His Highness Sheikh Mohamed bin Zayed Al Nahyan, and the successful culmination of COP28 in Dubai, the message is clear: Sustainability is not optional. The UAE proudly launches Ad Net Zero, marking a pivotal moment in our journey towards sustainability. This initiative, a project close to my professional journey in the UAE, is not just a response to a global climate emergency; it is a bold statement of our commitment in the advertising industry. Ad Net Zero empowers us to leverage our industry's unique influence to drive meaningful change. With this launch of Ad Net Zero, it's imperative to remember that everyone has a crucial part to play. This isn't just an initiative for the advertising industry; it's a universal call to action. Every individual, business, and sector can make impactful contributions toward our sustainable future. Let's unite in this vital effort."

Sebastian Munden, Chair of Ad Net Zero, said, “We are pleased to see the reach of Ad Net Zero grow with the launch of the UAE Chapter, which will act as the regional hub for MENA. It takes motivated people across the sectors to get momentum for launch. The ABG’s public commitment to a more sustainable future in advertising is a vital step and connects them to the global community and the Ad Net Zero tools to help facilitate this outcome.

“Motivating citizen behaviour change at scale was a topic that came up in many discussions I was part of at COP 28 in Dubai. A more sustainable and globally connected approach, from how ads are made to what they promote, can only be a good thing. There's no time to lose."

The ABG recently unveiled its sustainability agenda that aims to empower the industry to take direct action and reduce its negative impact from both advertising emissions and content. The agenda focuses on building a more sustainable sector through emissions reduction, closing the industry-wide sustainability knowledge and skills gap, and empowering the industry to combat greenwashing practices.

Leyal Eskin, Vice President, Head of Personal Care Business GCC Countries at Unilever and Chair of Advertising Business Group commented, “The Advertising Business Group’s (ABG) alliance with Ad Net Zero marks a pivotal moment in driving environmental sustainability for the UAE advertising industry and supports the UAE’s Net Zero commitment. This collaboration is a testament to ABG's overall commitment to driving responsible advertising business practices and will help shape a sustainable future for the UAE’s advertising and marketing industry."

The advertising sector needs to take responsibility for a sustainable future, through both reducing its operational emissions and through creating work that leads to a more sustainable future.

Ad Net Zero supporters, global, and at a national level, are required to set public science-based net zero targets. This can be done through either the Science Based Targets initiative, a commitment to the UN Race to Zero (including via the SME Climate Hub), The Climate Pledge, or other comparable alternatives. Supporters need to measure and report their progress annually. If supporters do not already have net zero targets in place, they are required to establish them within 15 months of joining Ad Net Zero. Ad Net Zero and ABG are committed to guiding supporters during the initial phase. For the first three months, both teams will offer comprehensive assistance, including information, training, and upskilling, to facilitate a smooth start to the measurement journey.

Today, consumers across the GCC prioritize sustainability when choosing brands and products and are willing to pay a premium for more environmentally friendly goods, according to research from Bain & Company. In this context of growing market opportunities and evolving consumer preferences, it becomes even more pertinent to align business operations with sustainability goals while ensuring seamless functionality and customer satisfaction.

On a brand level, there are tactics that can be implemented that not only help to meet the bottom line but also support sustainable objectives whilst fostering strategic growth. In today's fast-paced business environment, effective Order Management Systems (OMS) are the crucial tool for ensuring seamless operations and customer satisfaction. However, recent statistics reveal that a significant number of businesses are not maximizing the potential of their OMS, leading to challenges such as order inaccuracies, inventory issues, and dissatisfied customers. FeatureMind is here to shed light on these findings and offer practical solutions for businesses looking to enhance their OMS capabilities.

Benefits to businesses deploying and strengthening their OMS:

1. Automation of logistics operations
2. Enhancing inventory management
3. Minimize employee error and save time
4. Enhance customer journeys
5. Empower consumers through transparency and the right to choose

Let’s discuss in detail how this works. 62 percent of retailers identify human error as the root cause of inventory or fulfillment issues. To address this challenge, businesses should embrace automation within their OMS. Automating repetitive tasks not only reduces the likelihood of errors but also frees up valuable time for employees to focus on more strategic aspects of the business.

Shocking as it may seem, 55 percent of retailers still rely on manual processes within their logistics operations. This outdated approach not only slows down the order fulfillment process but also drastically increases the risk of errors and confusion. Moving to digital solutions will help eliminate manual bottlenecks and improve overall efficiency within day-to-day operations, while also reducing the environmental footprint associated with unnecessary resource consumption.

Enhancing the customer experience is paramount in today's e-commerce landscape, where expectations are higher than ever before. Businesses can elevate their service standards by harnessing the advanced tracking and communication capabilities inherent in their OMS. By furnishing customers with precise and up-to-date information regarding their orders, including real-time tracking of shipment progress and accurate estimated delivery dates, businesses not only meet but exceed customer expectations, fostering trust and loyalty in the process.

Today's consumers crave transparency and control over their purchasing journey, with over 30 percent of consumers switching channels between online and in-store shops, or using a mixture of both, finds PwC. By integrating customer-facing features into their OMS, businesses can empower consumers to track orders, modify shipments, and manage returns seamlessly. These features also help consumers select more sustainable methods of purchasing and delivery, such as selecting energy-efficient or low-waste delivery services. Providing consumers with greater visibility and control not only enhances their overall experience but also fosters brand loyalty and repeat business due to eco-conscious practices.

Brands that recognize the true potential of OMS as a powerful tool for enhancing inventory management put themselves at a significant advantage, with almost half the brands admitting that they see room for improvement of their inventory processes. Integrating sustainability considerations into OMS functionalities offers businesses a competitive edge, with improved inventory management enabling cost reduction and operational efficiency enhancements. In addition, better inventory management practices and enhanced visibility across channels can help mitigate the devastating cost of managing returns, estimated at about 30 percent for online sales by Gartner, which often wipes out the profit margin on a sale, if not costing the company money. By reducing returns and maximizing the value of their stock, businesses not only mitigate financial impacts but also significantly enhance the customer experience. Leveraging the data available, companies can proactively work to minimize returns and efficiently manage them when they do occur, further optimizing their operations and bolstering customer satisfaction.

In today's rapidly evolving business landscape, effective Order Management Systems (OMS) are not merely tools for streamlining operations but pivotal drivers of success and customer satisfaction. Despite their potential to revolutionize business processes, it's disheartening to note that many enterprises are falling short of fully harnessing the capabilities of their OMS. However, amidst these obstacles lies a remarkable opportunity for growth and transformation. By confronting these challenges head-on and embracing the recommended solutions, businesses can unlock the true potential of their OMS.

The culmination of the SRF in Riyadh brought together entrepreneurs, leaders, innovators, and global retail giants, echoing the legacy of the Middle East Retail Forum (MRF) initiated 12 years ago in the UAE. 

Research says the KSA retail industry is poised for robust growth over the next five years, driven by factors such as increasing consumer spending, a growing population, and the KSA government's initiatives to boost the non-oil sector. Forecasts indicate a compound annual growth rate (CAGR) of 7.2% from 2023 to 2028, reaching a market value of $142 billion by the end of this period. E-commerce is anticipated to play a pivotal role, with a projected CAGR of 15%, reflecting the evolving consumer preferences and digital transformation in the Saudi retail landscape.

The SRF navigated a diverse array of topics, unlocking the treasure chest of retail opportunities that lie ahead for Saudi Arabia. From Retail Tech Vision 2030 to the future-forward landscape of shopping centers, the forum explored the pulse of evolving consumer behavior and the transformative power of technology, particularly in AI-driven marketing. Also, the culinary playbook unfolded a flavourful journey, while a spotlight on Saudi fashion and lifestyle revealed a market poised for revolutionary trends. With a keen focus on homegrown initiatives ready to make a global impact, the forum explored the dynamics of e-commerce in the KSA.

The CEO's Agenda took center stage as the key session during the forum, drawing key CXOs to root into the immense potential of the Saudi Retail Market.

Speaking at the panel, Shehim Muhammed, Director of LuLu Saudi Hypermarkets shed light on the dynamic shift in the KSA retail landscape.

“A $125 billion journey represents the shift of KSA retail brands from a 20% organized retail sector in 2010 to 80% by 2030. Despite inflation challenges, the tug-of-war between affordability and sustainability is evident, with the rising influence of female consumers, projecting 85% discretionary spending by 2030. Further, we believe in collaborative AI implementation to make online commerce profitable, recognizing its current secret of the retail market expansion.”

Neeraj Teckchandani, Group CEO of Apparel Group, highlights key trends in the fashion industry, and said, “As seen in brands like Lululemon, customization, exemplified by Crocs, contributes to the retail industry significantly. Additionally, sustainability practices are surging, with consumers willing to pay 30-40% more. Recognizing the shift, we at Apparel Group launched five global initiatives and we understand the necessity of long-term sustainability, essential for the evolving preferences of Gen Z and Gen Alpha.”

Mohammed Naji Al-Assaf, CEO of Majid Al Futtaim Retail in Saudi Arabia, emphasizes the need for a joint effort in sustainability among retailers, producers, customers, and the Government. He challenged the misconception of the grocery business as masculine, highlighting the increasing presence of female leaders. Further, Al-Assaf sees the coexistence of physical and digital channels as crucial in the grocery industry, stressing the irreplaceable human touch in customer interactions.

As the Founding Partner and CEO of Brands for Less, Toufic Kreidieh said, “KSA consumers are willing to pay extra for sustainability, with 20% open to an 11-20% price increase.” Addressing the challenge of promoting local brands, he urges retail groups to champion initiatives that integrate them into portfolios. Kreidieh added, “Digital transformation should not be considered as a competition but a tool to enhance the omnichannel experience. Embracing technology, including artificial intelligence, is essential for business progress, ensuring a favorable wind in the storm of change. The future holds limitless possibilities for customer service, even envisioning AI-enabled robots in retail stores."

Emphasizing the transformative power of the younger generation in the Middle East, Tawhid Abdulla Founder and CEO of Jawhara Jewellery expressed his expertise in the Jewellery industry, “showcasing young individuals' creativity in overcoming challenges in the jewelry industry.” Addressing a gap in retail, Abdulla urges the establishment of institutes to groom local talents, fostering entrepreneurship and career development has been critical in KSA, and recognizing the evolving independence of Arab women, he underscores their influential role in shaping retail demands.

The IMAGES RetailME Awards KSA, following the SRF, commended outstanding retailers in Saudi Arabia across diverse categories such as fashion, food, grocery, leisure, entertainment, online retail, and store design. Emphasizing both global and home-grown retail concepts, this year witnessed a remarkable moment as a total of 28 brands were honored during the gala ceremony. The IMAGES RetailME Awards KSA was a culmination of a rigorous review by a qualified jury, and celebrated excellence in the retail landscape with a prestigious gathering.

The impact of fast retail, with its massive waste and extensive emissions, has acted as a catalyst for a radical shift in perspective. It is a full realization that, in the manufacturing sector in particular, sustainability is not a choice; it should be a requirement. 

Unmasking the Cost Argument: The Myth of 'Too Expensive'

Among the commendable push for sustainability, a persistent adversary emerges — the purported high cost. However, the veracity of this claim is crumbling with pioneering efforts of what we create within the industry. The model shift required demands substantial capital investments, a relentless pursuit of uncharted territories, and a keen communication of the mandatory for change across all business levels.

Regardless of business size, manufacturers take responsibility, and the cost factor must be transparently addressed with clients and customers. 'Going Green' may incur a premium, particularly in the luxury sector where top materials command higher prices. Not without challenges yet armed with data-driven responses, we navigated through queries about recycling costs. Presenting clients with irrefutable facts on emissions, transportation methods, and related aspects, backed by carbon calculator software, is the educational channel that companies must traverse when met with pushback.

Advocating for Systemic Change: The Role of Governments and Industry Regulatory Bodies

It is beyond individual corporate efforts, advocating for the creation of an official 'Green Entity' at governmental levels in the GCC. COP28, a potential catalyst for sustainable action, could birth an entity equipped to provide tools and assistance for companies, offering factually based education and support in reducing emissions.

Governments in the GCC must play a pivotal role by establishing comprehensive frameworks, and guiding industries, and SMEs toward tangible actions aligned with the UAE's ambitious 2050 sustainability goals. Regulatory bodies can amplify these efforts by offering financial incentives or tax breaks for businesses adopting eco-friendly measures. Post-sufficient training, a taxation scheme could be enforced to ensure compliance and weed out disregard for policies.

Alpha Nero's Carbon Calculation Solution: A Homegrown Innovation

In response to the intricate web of data across diverse projects, Alpha Nero recognized the need to comprehend and manage extensive information. This led to the developing of a detailed carbon footprint calculation software tailored for retail manufacturing.

The software divides emissions into three scopes—direct emissions (Scope 1), energy-related emissions (Scope 2), and the intricate nuances specific to luxury retail (Scope 3). It not only personalizes manufacturing processes but also ensures scalability, limited manual input, and tangible visualization of emissions impact. Looking forward, the integration of machine learning and AI will further refine processes, identify discrepancies, and recommend sustainable alternatives. 

In conclusion, the argument that sustainable manufacturing is 'too expensive' can be shifted with the help of education, social responsibility, innovation, and determination. The manufacturing sector holds the power to be a driving force for positive change by aligning business practices with global sustainability goals. The cost of sustainability is not an expense — it's an investment in a future where responsibility, innovation, and prosperity coexist harmoniously.

This is the extent of the leadership role that the UAE has come to play in global ESG finance according to Bashar Al Natoor, Global Head of Islamic Finance and Managing Director at Fitch Ratings.

Investing in green bonds or other ESG-related assets pays clear dividends to investors. Research by EY shows that 70% of companies actively addressing climate change are seeing financial benefits that exceed their initial expectations. Furthermore, those companies that are taking particularly ambitious steps in their climate action strategies are 2.4 times more likely to witness financial returns that are significantly higher than they anticipated.

And global investors are pouring ever larger amounts of capital into climate finance. Average annual climate finance flows reached almost $1.3 trillion in 2021/2022, nearly doubling the amount from just a year before and representing 1% of global GDP. This is significant, considering that few people had even heard of climate finance less than two decades ago, and the world’s first green bond which only came into existence in 2008.

We’ve come a long way since then. Bloomberg data reveals a 10-fold increase in global issuance of sustainable finance products between 2016 and 2021, and markets, such as the GCC, have been at the forefront of dynamic growth in recent years.

The State of Climate Finance in the GCC

Climate finance, which refers to financial investment and funding targeted at climate change mitigation and adaptation projects and initiatives, was one of COP28's themes.

President-designate of COP28, H.E. Dr Sultan Al Jaber, saw climate finance as a “cornerstone” of the conference’s action agenda. In an interview with The National, he pressed leading global institutions to play a greater role to “turn billions into trillions” to fund solutions to combat climate change, underscoring the urgency of such investment.

UAE was the first country in the Middle East to ratify the Paris Agreement and has demonstrated its commitment to climate-focused investment via a series of national and emirate-level initiatives, such as the UAE Green Agenda 2030, the UAE Guiding Principles on Sustainable Finance (2017), and Abu Dhabi Sustainable Finance Declaration (2019), among others.

The numbers are remarkable. The UAE government has pledged an initial investment of $163 billion as part of its national strategy to reach Net Zero by 2050. By the end of 2022, six major UAE banks (FAB, ADCB, ENBD, DIB, Mashreq, and ADIB) had allocated over $51 billion in green financing for projects including renewable energy, waste management, and green technology.

Prominent players from outside of the banking sector are also playing crucial roles. Masdar (Abu Dhabi Future Energy Company), successfully raised $750 million in its debut sale of green bonds in July. The company has developed and invested in renewable energy projects in 40 countries since 2006.

The growth of Masdar City in Abu Dhabi, which has been pioneering sustainable urban development for the past 15 years, paved the way for the formation of the Masdar Green Real Estate Investment Trust (REIT) in 2020. With an initial evaluation of more than $250 million, the first of its kind in the region is today valued at nearly $750 million. It is one of the few REITs worldwide consisting of LEED Platinum and Gold-rated buildings. 

The UAE Central Bank indicates that non-bank institutions contribute approximately 30% of the country's financing dedicated to ESG initiatives. The total ESG financing in the UAE surpassed $6 billion in 2022.

The UAE is not the only country in the GCC aspiring to be a global frontrunner in climate finance.

Like its neighbor, Saudi Arabia has also established a clear national strategy to drive its climate agenda. As part of the Saudi Green Initiative, it has committed to an initial investment of $180 billion to achieve Net Zero emissions by 2060. The Public Investment Fund (PIF) is allocating $40 billion per year towards green investments until 2025, under its Green Finance Framework, to stimulate non-oil economic growth and diversification.

At the Africa Climate Summit two months ago, a group of prominent Emirati investors – including the Abu Dhabi Fund for Development, Etihad CreditInsurance, Masdar, and AMEA Power – committed $4.5 billion to support clean energy projects in Africa. More recently, at the Saudi-Arab-African Economic Conference, the Arab Coordination Group, spearheaded by Saudi Arabia and joined by several GCC-based financial institutions, revealed their big plan to set aside a whopping $50 billion to develop climate-resilient infrastructure in Africa.

Green Sukuk: A New Frontier in Green Financing

The GCC's big push into climate finance is also getting a boost from its solid footing in capital markets, especially in Islamic finance. Take Dubai, for instance – it's one of the world's top spots for listing sukuk (Shariah-compliant bonds). Right now, there's a massive $82 billion worth of sukuk listed there.

Green sukuk, blending eco-friendly investments with Islamic finance principles, has taken off in the last couple of years. In the GCC, there was an impressive issuance of $8.5billion in green bonds and sukuk last year, more than half of which came from Saudi Arabia. This is huge leap – more than 10 times higher than in 2021.

In the past year, companies like Majid Al Futtaim Holding, the Middle East’s biggest mall operator, and Aldar Properties, Dubai’s largest listed developer, have all secured substantial funding via green sukuk issuance.

We’ve also seen the debut of the UAE’s first-ever dirham-denominated green sukuk, issued by the First Abu Dhabi Bank (FAB), which is a significant step in broadening the UAE's financial markets and aligning its institutions more closely with the country's sustainability goals.

This regional surge occurred despite a global downturn, which saw a 14% decline in green bond sales over the same period. According to Bloomberg, this is partly thanks to the back-to-back COPs in the region, which have pivoted green finance into the regional mainstream.

Public Perception of Climate Action

As we've seen, climate finance largely depends on institutions and businesses due to the substantial capital involved. However, this raises a question: What is the perspective of ordinary people?

Concern for the environment is increasingly driving purchasing behaviors. Our research reveals that 60% of UAE residents are willing to spend more on eco-friendly products, and nearly half view helping the environment as a priority in their purchasing decisions.

In Dubai, young people show a particularly strong interest in environmental initiatives. They are 6% more inclined than their peers across the UAE to pay extra for eco-friendly products. Notably, almost one in five say that a company's environmental credentials are the most significant factor influencing their purchasing decisions.

When it comes to everyday actions, the commitment to the environment remains strong among UAE residents. Over a third consistently make an effort to recycle, a trend that spans all age groups. However, it's interesting to note that those in a higher income bracket (earning more than AED 300,000 or $82,000 annually) are 11% more likely to engage in recycling compared to others.

There is then clear public enthusiasm for climate action and individuals take their responsibilities seriously.

Therefore, businesses should seize the opportunity to align their strategies with the growing consumer demand for eco-friendly products, as our research indicates a strong market preference for sustainable practices, particularly among younger demographics in Dubai.

Looking Ahead

It's crucial to recognize the immense potential of sustainable finance in shaping our planet's future. And let’s not forget the impact it can also have in tandem on our economic future. According to a 2023 PwC study, green investments in key GCC industries could dramatically transform the economic landscape by 2030, potentially adding $2 trillion to the region’s GDP, creating over a million jobs, and attracting significant foreign direct investment.

We must align our actions with sustainable goals, driving forward the green wave of finance. In essence, 'Riding the Rising Green Wave of Sustainable Finance' is about actively shaping a resilient, sustainable future for all.

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As a consumer campaigner, I often emphasize the importance of being informed and proactive in our purchasing decisions. We need to understand the power of our choices and the impact they have not only on our own lives but also on the broader market and environment. To this end, brands must do the same. Calculating the specific impact of greenwashing on consumer understanding, especially in relation to a specific event like COP28, is a complex task that involves many variables – but some facts are clear:

• Greenwashing can significantly mislead consumers about the environmental practices of companies, thus hindering genuine sustainability efforts. It leads to consumer skepticism and reduced trust in eco-friendly claims and ESG initiatives that are not as often as they seem.
• Research shows that consumers are becoming more environmentally conscious. However, the presence of greenwashing can slow this trend by creating confusion and mistrust.
• Brand Trust, once eroded, can take a long time to rebuild. In cases of widespread misinformation or distrust, it might take several years for consumers to regain confidence in eco-friendly claims.

Greenwashing around events such as COP28 creates significant confusion and could set back consumer understanding and trust by 1-3 years. This is based on the time required to correct misinformation and rebuild trust and is factored into the typical pace of changing consumer behavior.

This timeframe also assumes continuous efforts by genuine environmental advocates to educate and clarify, along with potential regulatory measures to curb misleading information around ESG claims and practices.

Why Does ‘Greenwashing’ Happen?

With COP28 in UAE, businesses are naturally trumpeting their environmental credentials. However, this surge in eco-friendly proclamations often veils a less commendable reality: While the intention to appear sustainable can momentarily boost a brand's image, it ultimately serves both the brand and its customers poorly.

Greenwashing is not just a deceptive marketing ploy; it contributes to a "land of confusion", muddying the waters of environmental education for end-users. The potential impact of this misinformation is, arguably, more detrimental than making no environmental claim at all. It misleads consumers, who are increasingly eager to support environmentally responsible companies, and hampers the progress toward genuine sustainability.

Greenwashing erodes consumer confidence in environmentally-friendly products. This deceptive practice damages the brand's credibility over time and impedes progress toward genuine environmental solutions. It also leads to a wary and perplexed consumer base, which becomes hesitant to support authentic sustainable efforts.

Several high-profile cases of global greenwashing have surfaced in recent years. For instance, a major automotive company faced backlash and legal consequences for falsifying emissions data, and misleading consumers about the environmental impact of their vehicles. Similarly, a prominent fast-fashion brand was criticized for its "eco-friendly" clothing line, which upon closer inspection, did little to address the fundamental issues of waste and unsustainable practices in the fashion industry.

The Role of Transparency and Accountability

In the face of greenwashing, transparency, and accountability emerge as critical components of corporate environmental responsibility. Companies must back their green claims with concrete data and verifiable actions. Third-party certifications and clear, honest communication about environmental initiatives are essential in building consumer trust and fostering genuine sustainable development.

Encouraging Authentic Environmental Efforts

While exposing greenwashing, it's important to acknowledge and support companies making authentic efforts toward sustainability. These businesses, often smaller and less visible, are laying the groundwork for a truly sustainable future. By choosing to support these enterprises, consumers can drive the market towards more honest and effective environmental practices.

The Path Forward

With COP28 ongoing, it's more important than ever for businesses to resist the temptation of greenwashing. Instead, they should focus on implementing genuine, impactful environmental initiatives. For consumers, the challenge lies in staying informed and discerning, avoiding the traps of misleading green claims.

The fight against greenwashing is not just about protecting consumer rights; it's about safeguarding the future of our planet. Brands and businesses must strive for a world where environmental claims are not just marketing strategies, but reflections of a company's genuine commitment to sustainability.

Abdo accepted the challenge to embark on the trip by riding Terra’s electric motorbike and experiencing its contemporary battery-swapping solutions. He began his journey in Abu Dhabi on the 25th of November. He completed it by arriving at Expo City Dubai in time for the first day of COP28 without a single charge by utilizing Terra’s battery-swapping concept. 

Image source: Terra Tech Ltd. (Terra)

Ali Abdo is a sustainability ambassador and environmental activist in the MENA region and holds a number of world records; such as: ‘World’s longest journey on an electric motorcycle’ which he completed in Egypt for his ‘Ride to COP27’ and 'The greatest distance on an electric motorcycle in 24 hours'. He is also the first Arab to achieve a Guinness World Record on an electric vehicle.

Abdo's Ride to COP28 was executed under the auspices of the Presidency of the COP27 Summit, the Egyptian Ministry of Youth and Sports, the Egyptian Ministry of Environment, in cooperation with the United Nations Development Program (UNDP) and the Earth’s Climate for Sustainable Development Foundation. Abdo set off on the 1st of October from the Arab Republic of Egypt, heading towards the COP28 conference held in the United Arab Emirates, while also passing through the Kingdom of Jordan, the Kingdom of Saudi Arabia, and the State of Qatar.

Image source: Terra Tech Ltd. (Terra)

Commenting on this adventure, Husam Zammar, Founder and Managing Director of Terra mentioned, “As a mobility startup based in the UAE with a revolutionary vision for electric mobility, we are pleased by Abdo’s acceptance of our challenge. We look forward to being a part of Abdo’s continued journey and showcasing the potential of renewable energy in transforming how businesses execute deliveries. We aim to prove how enduring our electric motorbikes and battery-swapping concepts are and to build trust among the general public to facilitate faster adoption of more renewable methods of transport.”

Similarly, Ali Abdo commented, “My experience with the Terra electric bike during my journey in the United Arab Emirates was truly remarkable. I did not need to stop to charge throughout the entire trip. This enabled me to cover a greater daily distance and save time that would typically be spent on regular charging operations, thereby emphasizing the importance of transitioning to sustainable transportation to reduce emissions and preserve the environment. My journey to the COP28 conference is part of the 'The Ride to 2030' initiative that combines the allure of traveling on electric bikes with awareness-raising activities for sustainable development goals in the MENA region."

Developed through qualitative and quantitative research in collaboration with strategists from 30 global Havas offices, the survey, with a sample size of nearly 1,013 people, was split evenly across the two main markets of UAE and KSA.

The findings highlight a shift towards aspirational frugality among prosumers while embracing a lifestyle of moderate consumption. 

“This study underscores Havas Middle East's dedication to understanding and leading in today's evolving market, marked by a significant shift towards more conscious and deliberate spending. We recognize the necessity of aligning with these emerging values – it's not just a smart business move, it's a moral duty. Our report urges brands to not just treat sustainability and mindful consumption as passing trends but to view them as essential, enduring shifts in how we manage our resources and responsibilities. At Havas, we're at the forefront of this evolution, empowering our clients to make a meaningful impact in building a more sustainable, frugal future." says Dany Naaman, CEO, Havas Middle East.

Highlights of the report:

• Minimalism Trend: UAE and KSA prosumers expressed readiness to embrace a minimalist lifestyle, viewing it as a liberation from outdated systems. Prosumers recognize the benefits of owning less and making conscious choices to reduce environmental impact.
• Waste Reduction: 61% of Prosumers in the UAE and 68% in KSA said they actively seek ways to recycle, reflecting a commitment to waste reduction.
• Prioritising Sustainability: Prosumers in the UAE (67%) and KSA (61%) prioritize needs over excess, opting for a more sustainable future through mindful purchasing.
• Energy Consumption: Over half of the prosumers in both the UAE and KSA demonstrate increased mindfulness in energy consumption, perceiving it as a healthier lifestyle with tangible cost savings.
• Brand Responsibility: Prosumers emphasized brands and companies' responsibility for climate change, driving a growing demand for businesses to incorporate frugality and contribute to sustainable practices.
• Consumer Perception: Only 8% (UAE) and 15% (KSA) of consumers said they believed that brands are currently making sufficient efforts to combat climate change.

As the region witnesses a shift towards frugality, businesses must consider the shifting values and aspirations of consumers, integrating sustainable practices into their operations to meet the growing demand for a more mindful and responsible way of life.

The full report can be accessed through this link.