The Sustainability Landscape In The Middle East
In recent years, there has been a strong and growing focus on sustainability and environmental, social, and governance (ESG) issues around the world, including in the Middle East. The sustainability landscape constantly evolves, particularly with new developments that bring about lasting shifts in social attitudes, policies, work, and consumption. For example, Middle Eastern stakeholders aim to address and mitigate the financial and economic impacts of environmental issues, such as climate change, by encouraging environmental protection, expanding renewable energy, andlessening the region’s economic and financial reliance on fossil fuels. Social issues are also prioritized, with investors and regulators demonstrating increased preference for a broader range of economic activities that provide positive societal benefits (e.g., gender equality and improved working conditions).
Companies must demonstrate a commensurate, substantial commitment to contribute to these efforts, as investors and regulators in the Middle East show greater interest in companies that follow ESG principles. These stakeholders want greater accountability and transparency from corporations about their sustainability risks, opportunities, and impacts to guide their decisions and create a more sustainable and inclusive future for the region.Businesses are reporting on their progress in integrating ESG factors into their business models, strategies, and outcome analyses to meet these growing demands.
Accordingly, the development of market-based standards and regulations in the Middle East in recent years has begun to align with and contribute to best practice efforts worldwide.
Country and Exchange-Level Developments
Bahrain
Bahrain Bourse, operator of the Bahrain Stock Exchange (BSE), has launched a voluntary ESG disclosure guide that closely aligns with the UN Sustainable Development Goals (SDGs), GRI, and Bahrain Vision 2030. Theexchange joined the UN SSE initiative in 2022 and supports the development of digital ESG disclosure platforms, with plans for mandatory reporting being considered in the future. Additionally, the Central Bank of Bahrain (CBB) has issued Directive No. OG/499/2023 which outlines the ESG and sustainable finance expectations for licensed financial institutions. The Directive requires companies to integrate sustainability factors into their internal governance and risk management frameworks and report on the results of this integration. Additionally, policymakers in Bahrain are considering the development of a national taxonomy to define and standardize sustainable economic activities.
Kuwait
Boursa Kuwait, operator of the Kuwait Stock Exchange (KSE), introduced its voluntary ESG Reporting Guide in 2021 as part of broaderprivatization and modernization efforts, with indicators based on WFE and SSE metrics and aligning with Kuwait’s National Development Plan. Furthermore, the Capital Markets Authority (CMA) has announced mandatory ESG disclosure requirements for listed companies starting in 2026 and is currently developing the reporting framework in line with regional standards like the GCC Unified ESG Metrics and global guidelines. Kuwait is also making progress on green finance. The Kuwait Investment Authority (KIA), one of the world’s most significant sovereign wealth funds, has publicly committed to integrating ESG factors into its investment decisions, supporting the country’s goal of sustainable economic growth.
Oman
The Muscat Stock Exchange (MSX) has introduced its own mandatory ESG reporting framework, and the Capital Market Authority (CMA) of Oman is actively engaging with listed companies to help them prepare for these upcoming requirements. The ESG strategy is closely linked to Oman Vision 2040, highlighting sustainability in governance, the environment, and economic diversification. Both the CMA and the Central Bank of Oman (CBO) emphasize the importance of board oversight in ensuring the integration of ESG into corporate strategy, expecting boards to take a leading role in disclosure approval, target-setting, and risk oversight as part ofbroader governance reforms. Finally, Oman’s Financial Services Authority (FSA) announced plans for the country to adopt a phased implementation of the International Financial Reporting Standards for sustainability-related disclosures (IFRS S1 and IFRS S2).
Qatar
The Qatar Financial Centre Regulatory Authority (QFCRA) has issued a Sustainable Finance Framework to guide ESG integration among financial institutions. At the same time, the Qatar Central Bank (QCB) has introduced its Principles for ESG and Sustainable Finance in 2023. These guidelines encourage financial institutions to have their boards oversee ESG issues, make sustainability an integral part of risk management and business strategies, and be transparent about their governance structures that support ESG decision-making. The Qatar Stock Exchange (QSE) released voluntary ESG guidelines with reference to recommendations from the UN SSE and World Federation of Exchanges (WFE), and these guidelines are expected to become mandatory by 2027. QSE has signed onto the UN SSE initiative, participates in capacity-building programs to support listed companies in ESG reporting, andoffers a complimentary ESG dashboard and reporting tool to help listed companies enhance their performancetransparency. Finally, the new Corporate Sustainability Reporting (CSR) Rules require certain firms, such as banks and insurers, to prepare sustainability reports in accordance with the ISSB Standards starting from January 2026.
Saudi Arabia
Saudi Arabia’s sustainability vision is reflected in national strategies such as Saudi Vision 2030 and the Saudi Green Initiative (SGI), with commitments to reach net zero by 2060, Saudi Arabia is committed to the Circular Carbon Economy approach, aiming to lower emissions usingtechnologies like carbon capture, utilization, storage, clean hydrogen, and energy efficiency. ESG principles are also being integrated into public sector entities. For example, the Public Investment Fund (PIF) has developed a sustainability charter aligned with national objectives and incorporates ESGconsiderations into its investment decision-making and portfolio strategy. In the corporate reporting realm, the Saudi Exchange (Tadawul) has promulgated voluntary ESG disclosure guidelines in line with Saudi Vision 2030. Tadawul also chairs the Gulf Cooperation Council (GCC) ExchangeCommittee, which has issued a Unified ESG Disclosure Framework to standardize ESG reporting across the region. Tadawul has also launched a sustainability-linked index and a Voluntary Carbon Market (VCM) initiative, holding its first carbon credit auction in 2022.
United Arab Emirates (UAE)
The UAE Sustainable Finance Working Group, comprising regulators and financial institutions, has issued a sustainable finance roadmap to guide its adoption across the sector. Reporting mandates are also growing in the country, with the exchanges (Dubai Financial Market and Abu Dhabi Exchange)having issued ESG disclosure guidelines that follow the national visions and priorities and having committed to climate disclosure practices aligned with the Task Force on Climate-Related Financial Disclosures (TCFD). At the same time, the Abu Dhabi Global Market (ADGM) also launched a binding ESG framework for large companies meeting certain revenue orAUM thresholds. In 2026, Cabinet Decision No. 66 of 2023 will require large public and private joint-stock companies to publish annual sustainability disclosures aligned with international frameworks.
Outside of the GCC
Several other Middle Eastern countries are also advancing national sustainability agendas, albeit with varied levels of regulatory maturity and market readiness. Egypt, as a key regional player, has embeddedsustainability into its Egypt Vision 2030 and has launched its Sustainable Development Strategy, while itsFinancial Regulatory Authority (FRA) now requires listed companies to publish ESG and TCFD-aligned climate disclosures. Egypt has also issued green bonds, including the region’s first sovereign green bond in 2020, and is promoting sustainable finance through its updated capital markets law. Jordan has introduced a NationalGreen Growth Plan, and the Jordan Securities Commission is exploring ESG disclosure guidelines. Lebanon’s central bank has published sustainability principles for financial institutions, and Iraq has announced a National Adaptation Plan with support from international development partners. Turkey is also advancing regulatory alignment, particularly through theTurkish Capital Markets Board (CMB), which published voluntary sustainability reporting standards for listedcompanies in 2020. In 2023, Turkey reaffirmed its intent to align national reporting requirements with ISSB standards, as part of a broader effort to converge with EU Green Deal expectations and improve the ESG readiness of Turkish capital markets. The Istanbul Stock Exchange (Borsa İstanbul) is a member of the UN Sustainable Stock Exchanges (SSE) initiative and has launched its own Sustainability Index to promote ESG integration among Turkish companies.
There is a growing recognition across the broader Middle East that aligning with global ESG standards is essential forclimate resilience, investor confidence, and access to international capital flows. For regional boards operating across or investing in these markets, staying attuned to these developments is critical to anticipating regulatory shifts, and long-term sustainability opportunities.
Global Reporting Frameworks Influencing the Region:
Now and in the future, companies operating in the Middle East must increasingly prepare for regulatory alignment, investor scrutiny, and growingstakeholder demand for credible, transparent, and comparable sustainability-related data. The result is a dynamic landscape where boards must stay informed and proactive to guide their companies through this period of transformation and opportunity. Many regulators and exchanges are integrating global frameworks into domestic policy frameworks and reporting mandates, with entities in the Middle East aligning with global ESG disclosure standards such as:
ISSB’s IFRS S1 and S2
Issued in 2023, these standards are becoming the global baseline for sustainability-related financial disclosures. In the Middle East, Qatar has taken steps toalign with the ISSB Standards in national legislation, with the new Corporate Sustainability Reporting (CSR) Rules mandating from 2026 onwards, Category A firms (banks and insurers) to publish their sustainability reports in accordance with IFRS S1 and S2. Many UAE-listed entities are also actively aligning theirsustainability and integrated reports with ISSB Standards, demonstrating strong market momentum and voluntary integration. Most recently, Oman’s financial regulator has announced plans to implement requirements aligned with the ISSB Standards.
TCFD and TNFD:
These frameworks emphasize financial risks related to climate change and nature, respectively, with growing relevance for Middle East companies.Climate and biodiversity are two sustainability-related issues increasingly prioritized by Middle Eastern governments, investors, financial regulators, and other stakeholders. Several companies in the region have begun piloting Taskforce on Nature-related Financial Disclosures (TNFD)-aligned assessments, especially in high-impact sectors such as energy, infrastructure, and agriculture.
GRI, Sustainability Accounting Standards Board (SASB), Climate Disclosure Standards Board (CDSB), Integrated Reporting, and World Economic Forum (WEF) Stakeholder Capitalism Metrics
These additional frameworks support comparability and investor-grade ESG disclosures. The use of GRI and SASB in dual-reporting formats continues to grow among listed companies seeking to meet impact and financial materiality requirements.
Therefore, transparency around sustainability is a strategic concern that rightfully belongs at the board level, notonly because boards oversee the integrity of disclosures, but because the implications of sustainability reporting extend far beyond the boardroom. In today’s interconnected ESG landscape, transparency is a key driver of stakeholder trust, regulatory compliance, and market competitiveness. For boards, the credibility and clarity of a company’s disclosures can directly impact:
Access to Capital
Investors and lenders rely on sustainability disclosures to assess long-term risk-adjusted returns, determine eligibility for green or sustainability-linked financing.
Regulatory Compliance
ESG reporting is increasingly embedded in listing rules, national strategies, and financial supervision. Clear, timely, and standards-aligned reporting is crucial for meeting evolving legal obligations and avoiding reputational or financial penalties.
Customer and Market Relationships
Business partners and customers, particularly in global value chains, use ESG data to evaluate supplier alignment with their commitments, such as carbon reduction targets, responsible sourcing, or human rights compliance.
Talent and Workforce Expectations
A company’s sustainability transparency is increasingly viewed by employees and job seekers as a proxy for its values, ethics, and long-term relevance. Authenticand open reporting helps attract and retain purpose-driven talent.
Reputation and Social License to Operate
Civil society, the media, and local communities look to ESG disclosures to assess how companies impact people and the environment. Boards prioritizing transparency help reduce the risk of stakeholder backlash, activism, or regulatory scrutiny.
Ultimately, transparency in ESG reporting is not only a compliance issue but also a strategic lever for enhancingstakeholder engagement and managing risk. Boards that proactively promote progress in corporate responsibility through credible, decision-useful reporting help position their companies for long-term success in a world where sustainability performance is increasingly scrutinized and regulated.
Sustainability In The Boardroom
ESG issues encompass strategic, financial, and operational factors, making them a fundamental responsibility of board members. By actively engaging in sustainability efforts, boards can enhance long-term resilience, foster innovation, and gain a reputational edge. Uniqus has identified several key drivers that shape board member responsibilities regarding effective ESG governance:
Material Risks and Opportunities
Thematic sustainability issues, including climate change, labor practices, regulatory shifts, and biodiversity loss, present significant risks to business continuity. ESG risks can lead to significant financial repercussions, including regulatory penalties, supply chain disruptions, and reputational damage. Proactive engagement on these topics not only mitigates downside risk but also enhances investor confidence, attracts capital, and supports long-term value creation. Meanwhile, sustainable products and practices can open up new market opportunities. Boards can regularly assess whether sustainability considerations are incorporated into strategic planning, capital allocation, scenario modeling, and stakeholder engagement practices.
Fiduciary Duty and Value Creation
Policymakers worldwide have acknowledged that fiduciary duty encompasses material non-financial risks, highlighting that sustainability is vital for long-term financial success. Companies in the Middle East need to demonstrate board-level oversight of sustainability, as regulatory, investment, and governance environments increasingly suggest that non-financial risks are critical to fiduciary oversight. For example, market leaders such as Mubadala, PIF, KIA, and QIA actively require the integration of ESG principles and responsible investing into their portfolio decisions, showing that fiduciary duty includes considering ESG factors for investee companies. Firms aiming to access international capital markets must also increasingly prove they have board-level oversight of sustainability issues. The table below details the timeline of key regulatory and investor developments supporting the inclusion of ESG within fiduciary duty.
Stakeholder Expectations
Employees, investors, and consumers are increasingly rewarding companies whose values align with their own, compelling boards to ensure their companies meet growing stakeholder expectations. Companies face scrutiny not only for what they may not disclose but also for their actions and behavior. A clear board-level commitment to sustainability establishes the tone for ethical conduct and responsible growth.
Core Areas Of Board Oversight
Board members must oversee a wide array of sustainability topics, but a focused approach on the most material issues is essential. Below are priority areas relevant to most Middle East businesses:
Boards should ensure these issues are incorporated into their organizations’ enterprise risk management, business planning, and performance incentives. They must also hold executive management accountable for progress and provide strategic oversight instead of merely offering passive endorsement.
Strengthening Board-Management Engagement On Sustainability
Key Questions to Ask Management
To lead in sustainability, board members should regularly challenge management with forward-thinking questions. Examples of such questions mayinclude, but are not limited to, the following:
- Are we aligned with national and global sustainability targets? What is our current progress?
- What are our material sustainability risks, and how are they managed on an ongoing basis?
- How does our current business model align with a low-carbon, equitable future?
- Do we have a climate transition plan with measurable targets and timelines?
- How is performance on sustainability issues incentivized across leadership and the rest of the organization?
- Are we investing in the right tools, data, and systems needed to track progress?
- How do our disclosure practices align with international and domestic frameworks (e.g., ISSB, CSRD, GRI)?
- Are our sustainability commitments integrated into capital allocation, procurement, and operations?
- What is our strategy for managing climate, water, and biodiversity risks across our physical assets?
These questions can help boards move from oversight to strategic direction. They also foster management’s discipline and transparency, reinforcing a culture of accountability.
Best Practices on Board-Management Engagement
To lead in sustainability, board members must go beyond passive oversight and establish proactive, structured dialogue with executive management. Regular engagement ensures the board stays informed about sustainability risks and opportunities, while reinforcing accountability throughout the organization. Click here to read more on the practices among leading businesses in the Middle East.
Uniqus POV
From Boardroom Intent to Business Action
Turning sustainability from a boardroom priority into a business reality requires unified action across the entire organization. This process involves translating strategic oversight into practical implementation, embedding sustainability into the organization’s core through its structures, personnel,and decision-making processes. Click here to read more about the key pathways to implementation.
Navigating Reporting, Assurance, & Transparency
Although corporate sustainability involves more than just disclosure and regulatory compliance, reporting remains essential for businesses to show accountability. However, corporate sustainability disclosures are becoming more complex and important as stakeholders seek greater transparency about thesustainability actions and performance of companies. Boards must ensure their organizations are prepared for the changing sustainability reportingenvironment. Click here to read more about the key factors in the sustainability disclosure landscape.
Benefits of Boardroom Integration
Sustainability is more than just a trend. It signals a fundamental shift in how companies are valued, regulated, and trusted. Boards in the Middle Easthave both a responsibility and an opportunity to shape their businesses’ future. By raising sustainability to the boardroom level and promoting implementation at every part of the company, they can help their organizations succeed.
We have seen that when boards take an active role in setting or approving ESG priorities, approving sustainability-linked investments, and overseeing transparent performance reporting, companies are better positioned to drive innovation, manage risk, and capture long-term value. Such practices demonstrate that sustainability is not merely a cost but also an investment in innovation, reputation, and long-term relevance.
In our view, companies that act early and consistently will gain a reputational and financial edge. Therefore, boards must:
At Uniqus, we are ready to partner with you on this journey, combining deep expertise, innovativetechnology, and a dedication to turning sustainability goals into lasting results. We assist organizations in transforming sustainability ambitions into measurable outcomes. Click here to read more about our integrated suite of services that board and companies can benefit from.
We integrate global experience with local insights to provide practical, technology-driven solutions. Ourstrength is in making sustainability concrete, backed by analytics, accountability, and assurance readiness.
