March 6, 2025
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According to Bloomberg Intelligence, global ESG assets surpassed approximately $30 trillion between 2022 and 2024 and are projected to exceed $40 trillion by 2030. This would represent over 35% of the estimated $140 trillion in assets under management, highlighting a significant shift towards sustainable and responsible investing.
Additionally, a McKinsey study found that 80% of investors review ESG reporting to assess its impact on cash flows, with most willing to pay a premium for businesses that demonstrate a strong link between ESG initiatives and financial performance.
From mitigating risks to unlocking new opportunities, ESG is redefining how businesses operate and thrive in a world increasingly focused on sustainability and ethical practices. By proactively addressing ESG risks, corporations can build resilience against emerging challenges.
Corporations play a pivotal role in addressing global challenges such as climate change, social inequality, and resource depletion.
For example, reducing greenhouse gas emissions supports global climate goals, while promoting fair labour practices and gender equality advances social progress. By integrating ESG into their operations, corporations can demonstrate leadership in driving positive change and creating shared value for society.
In 2016, the UAE was one of the first countries to ratify the Paris Agreement. In 2015, the UAE submitted its first Nationally Determined Contribution (NDC) to the UN Framework Convention on Climate Change (UNFCCC), outlining its commitment to increasing clean energy to 24% of the total energy mix by 2021. This commitment also encompassed initiatives in infrastructure development, energy and water efficiency, sustainable water management, food security, and public awareness programmes.
In 2020, the UAE submitted its second NDC, setting a target to reduce greenhouse gas emissions by 23.5% by 2030. To achieve this, the country has focused on expanding clean energy adoption, enhancing energy efficiency, developing carbon capture and storage technologies, conserving blue carbon ecosystems, and promoting sustainable agriculture.
Recognising the urgent threats posed by climate change, the UAE has taken significant steps to transition towards a sustainable, green economy. Through a series of well-defined strategies and initiatives, the UAE is prioritising resource efficiency, environmental protection, and inclusivity to ensure a resilient future for generations to come.
The UAE Vision 2021 lays the foundation for sustainable development by harmonising economic growth, environmental conservation, and social well-being. It integrates sustainability principles across all sectors, aiming to reduce reliance on fossil fuels and increase the share of renewable energy in the country’s energy mix.
The National Green Agenda focuses on transforming the UAE into a green economy by promoting sustainability and resource efficiency. It aims to diversify the economy while prioritising energy, water, and material efficiency.
The National Climate Change Plan is a comprehensive roadmap to address climate change and transition to a low-carbon economy, aligning with the Paris Agreement’s goal of limiting global temperature rise to 1.5°C.
In line with the National Climate Change Plan, the UAE launched the Net Zero by 2050 Strategic Initiative, reinforcing its commitment to global climate goals. To support this vision, the UAE has established the Sustainable Finance Working Group (SFWG), which collaborates with the Securities & Commodities Authority (SCA) to position the country as a regional hub for sustainable finance. The Three Pillars of the Sustainable Finance Framework are:
While the UAE does not currently have a carbon tax, it has implemented other measures to reduce its carbon footprint. The country has set ambitious renewable energy targets, aiming to generate 50% of its energy from renewable sources by 2050.
Investments in carbon capture and storage technology, along with sustainable transportation initiatives such as the Dubai Metro and Abu Dhabi’s electric bus fleet, further demonstrate the UAE’s commitment to sustainability.
On the global stage, the UAE is an active participant in international climate efforts. It is a signatory to the Paris Agreement and will host the 28th UN Conference of Parties (COP28), showcasing its leadership in climate action.
The Securities and Commodities Authority (SCA) has introduced mandatory ESG disclosure requirements for all companies listed on the Dubai Financial Market (DFM) and Abu Dhabi Securities Exchange (ADX). This transformative step underscores the UAE’s ambition to lead in sustainable economic development while enhancing corporate transparency and accountability.
This law aims to regulate waste management processes by unifying mechanisms and methods for proper disposal, applying best practices and technologies to protect the environment and human health. It prohibits individuals and businesses from disposing of waste in undesignated areas, including open spaces, roads, and waterways, and establishes penalties for such violations.
Effective from May 30, 2025, this decree mandates that businesses across various sectors measure, monitor, and report their greenhouse gas emissions. It places stringent requirements on high-emission industries such as energy, manufacturing, and construction to develop and implement decarbonisation strategies aligned with national climate goals.
This resolution establishes a comprehensive framework for regulating greenhouse gas emissions through the creation of a national carbon credit registry. It requires organisations operating in key economic sectors to submit detailed reports on their carbon emissions, energy consumption, and mitigation measures, thereby promoting responsible corporate governance and laying the foundation for future carbon pricing and trading mechanisms in the UAE.
With financial incentives and government support, companies in the UAE have the tools and motivation to align their operations with the nation’s vision for a greener future. The time to act is now—businesses that proactively integrate ESG principles will not only mitigate risks but also unlock new opportunities for growth and innovation.
As the UAE continues to lead in sustainability, corporate leaders have a unique opportunity to drive meaningful change and secure long-term value.
The question is no longer why ESG matters—it’s how your organisation will rise to the challenge and lead with purpose.
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