Sustainable Square, our extensive experience in ESG advisory across the Middle East enables us to observe and predict the region’s transformation and offer actionable insights on the region's evolving ESG journey. We are proud to share our top ESG trends reshaping the region's corporate landscape in 2025, highlighting the trends per country.
1. Mandatory ESG Reporting Expands
Regulatory bodies across the GCC are ramping up efforts to enforce mandatory ESG disclosures. In countries leading the ESG charge, reporting will extend to non-listed companies and previously excluded industries.
This aligns with global frameworks, ensuring the region’s businesses are investor-ready. Compliance is no longer optional; ESG readiness is now a critical business priority.
- Saudi Arabia: In 2021, Tadawul (Saudi Stock Exchange) launched sustainability disclosure guidelines to promote greater ESG reporting. Publicly listed companies are encouraged to publish non-financial ESG reports.
- UAE: Dubai and Abu Dhabi free zones, along with regulators like the Dubai Financial Services Authority (DFSA) and Abu Dhabi Global Market (ADGM), will mandate sector-specific reporting for large enterprises, particularly in finance, real estate, and energy. In June 2024, the UAE Sustainable Finance Working Group (SFWG), which includes the Securities and Commodities Authority (SCA), introduced principles aimed at enhancing voluntary sustainability disclosures across the financial sector, going beyond listed companies.
- Oman: Starting in 2025, public companies will be required to publish standalone ESG reports aligned to the GRI Universal Standards. Additional sectors, such as logistics and manufacturing will face mounting pressure to adopt ESG reporting, driven by regulatory reforms and Oman Vision 2040.
- Bahrain: ESG reporting mandates will target financial services and real estate, reflecting Bahrain’s Economic Vision 2030. As mandated by Bahrain Bourse (BHB) and Central Bank of Bahrain (CBB), all banks, financing companies, insurance firms, and category 1 and 2 investment firms must comply with mandatory ESG requirements starting December 2024.
- Qatar: QSE-listed companies will face enhanced ESG reporting mandates focused on governance, sustainability, and stakeholder transparency. The first in the region to act on adopting the IFRS standards, the Qatar Financial Centre Regulatory Authority (QFCRA) recently published proposed amendments to align corporate sustainability reporting with IFRS S1 and IFRS S2.
- Kuwait: ESG disclosure remains voluntary, guided by Boursa Kuwait’s framework, which aligns with GRI, the United Nations Sustainable Development Goals (SDGs), and Kuwait's Development Plan 2035. The Capital Markets Authority is considering introducing mandatory ESG reporting to enhance transparency for large listed enterprises.
- Jordan: Although regulations are less developed, voluntary ESG reporting is gaining traction, driven by investor demands. Large enterprises in banking, telecom, and infrastructure are under pressure to adopt ESG disclosures to attract global investors. Mandatory ESG reporting exists for companies listed on the Amman Stock Exchange (ASE), but these disclosures can be standalone reports or integrated within financial reports.
What you can do:
Large companies should adopt global frameworks like GRI and ISSB while proactively preparing for emerging regional regulations.
2. Rise of Net Zero Commitments
As the Middle East strives to position itself as a global sustainability leader post-COP28, net zero commitments are becoming the standard across industries. Governments are pressuring large corporations, especially in carbon-intensive sectors like oil and gas, construction, and utilities, to develop actionable transition plans.
This includes investing in renewable energy and carbon capture technologies. Stakeholders will increasingly demand clear timelines and measurable milestones.
- Saudi Arabia: Companies in sectors like oil & gas and construction must outline carbon reduction roadmaps aligned with Vision 2030’s goals. State-backed entities like Saudi Aramco are spearheading net zero projects, with renewable energy investments and green hydrogen leading the agenda.
- UAE: Public and private sectors are accelerating net zero initiatives in preparation for the UAE Net Zero by 2050 target, with a particular focus on renewable energy, greening power generation, industry (including oil and gas, cement, iron, steel, aluminium), transport and logistics, agriculture, waste, and real estate.
- Oman: Listed firms will face stricter guidelines to align with national visions, requiring sustainability reports and transparency to stakeholders. Renewables and energy efficiency projects, such as solar-powered desalination plants, will dominate the net zero roadmap.
- Bahrain: Efforts to achieve carbon neutrality by 2060 will emphasise energy transition in aluminum production and other carbon-intensive industries.
- Qatar: Energy-intensive industries like Liquefied Natural Gas (LNG) and petrochemicals must adopt carbon capture and storage technologies to meet net zero ambitions.
- Kuwait: Enterprises in oil and gas need roadmaps to align with global decarbonisation trends and international climate agreements.
- Jordan: Net zero commitments will focus on enhancing solar and wind capacity, as well as reducing emissions in agriculture and water management. Large enterprises in banking, telecom, and infrastructure are under pressure to adopt voluntary ESG disclosures to attract global investors.
What you can do:
Establish carbon reduction plans with actionable science-based targets and explore investments in renewable energy.
3. ESG Driving Regional Investments
The rise of ESG-focused investment criteria is reshaping how capital is allocated. Sovereign wealth funds, like Saudi Arabia’s PIF and the UAE’s Mubadala, are integrating ESG benchmarks into their portfolios, emphasising low-carbon technologies, circular economy innovations, and socially responsible projects.
With regional stock exchanges increasingly mandating ESG disclosures, private equity and venture capital firms are also prioritising ESG due diligence, signaling a shift in investment practices across industries.
- Saudi Arabia: Sovereign wealth funds like the Public Investment Fund (PIF) will prioritise low-carbon technologies and megaprojects like NEOM and the Red Sea Project. Sovereign wealth funds are favouring ESG-compliant businesses in sectors like energy, tourism, and technology.
- UAE: Large investors are seeking enterprises with strong ESG credentials in green finance, clean tech, and infrastructure. Mubadala and ADQ are driving ESG-aligned investments in healthcare, logistics, and renewables, with an emphasis on private equity.
- Oman: The Oman Investment Authority is increasingly backing green infrastructure projects, particularly in renewable energy. ESG-driven investments will focus on sustainable supply chains and industrial practices.
- Bahrain: Investments in fintech and green finance initiatives are gaining traction, with a focus on ESG-aligned lending by banks.
- Qatar: Sustainable investments in LNG, construction, and sports, events, and tourism sectors (post-World Cup) are gaining traction.
- Jordan: International donors and development banks are funding ESG projects in infrastructure, water management, and renewable energy.
What you can do:
Strengthen ESG performance data to appeal to sustainability-focused investors and incorporate ESG metrics in financial disclosures.
4. Localisation of ESG Frameworks
While global ESG standards set the foundation, Middle Eastern markets are tailoring ESG frameworks to reflect national ambitions. Programmes like Saudi Vision 2030, UAE Net Zero by 2050, and Bahrain’s Economic Vision 2030 are shaping local ESG priorities. Businesses are focusing on region-specific issues such as desertification, water security, and cultural heritage preservation while aligning their sustainability goals with government initiatives.
Large enterprises operating in diverse sectors are adopting tailored ESG approaches.
- Saudi Arabia: ESG frameworks will align closely with Vision 2030 priorities, focusing on economic diversification, Saudisation, and environmental protection.
- UAE: Localised ESG frameworks will emphasise innovation, digital transformation, and compliance with free zone-specific guidelines.
- Oman: ESG practices will be tailored to support Oman Vision 2040, with a focus on water conservation and renewable energy. Companies are expected to embed ESG principles into operational practices, such as waste management and energy efficiency.
- Bahrain: Efforts will centre on adapting ESG strategies to address environmental challenges like sea-level rise and land reclamation.
- Qatar: Qatar National Vision 2030 focuses on environment protection, renewable energy, efficient resource use, and building environmental awareness. It stipulates that enterprises are expected to integrate ESG into, among others, infrastructure, energy, and technology projects.
- Kuwait: Organisations will align with Kuwait Vision 2035, which focuses on transitioning to a low-carbon economy, promoting renewable energy sources, conserving natural resources, reducing GHG emissions, and aiming for net-zero by 2050.
- Jordan: ESG frameworks will prioritise social impact, including job creation and gender equality, while addressing climate resilience. Large enterprises are aligning with global ESG best practices to attract international funding.
What you can do:
Customise ESG strategies to align with local regulatory frameworks and national visions while addressing sector-specific challenges and meeting global standards.
5. Greater Focus on Social Impact
The spotlight is shifting to the 'S' in ESG, with social issues gaining prominence. Businesses are implementing diversity, equity, and inclusion (DEI) policies, improving workforce welfare, and strengthening local community engagement. Governments are emphasising nationalisation programmes like Saudisation and Emiratisation to boost local job creation, while companies are prioritising training and upskilling initiatives to meet workforce development needs.
Stakeholders expect large enterprises to lead on social responsibility initiatives:
- Saudi Arabia: Social initiatives will emphasise Saudisation and women’s empowerment, with corporates expected to support these through training and development programmes.
- UAE: DEI will dominate the agenda, with a focus on workforce diversity and community development projects.
- Oman: Social impact strategies will centre on education, workforce development, and empowering SMEs.
- Bahrain: Nationalisation programmes will drive workforce localisation, while CSR efforts focus on community welfare.
- Qatar: Social initiatives are focused on community development and post-World Cup legacy projects, such as promoting sustainable construction practices, improving worker rights, investing in renewable energy sources, enhancing public transportation systems, and establishing initiatives to address public health and occupational safety.
- Kuwait: Large firms are investing in youth training and empowering women in leadership roles.
- Jordan: Youth employment, education, and community health initiatives will gain momentum, driven by private-sector and donor support.
What you can do:
Incorporate measurable DEI goals, community impact projects, and employee development programmes into ESG strategies.
6. Growth of Sustainable Finance Opportunities
The region is experiencing a surge in sustainable finance instruments such as green bonds, sukuks, and sustainability-linked loans. With banks increasingly offering ESG-driven products, companies now have access to financing opportunities tied to achieving measurable sustainability goals.
The UAE, Saudi Arabia, and Qatar are leading the way in launching ESG-focused financial markets, creating fertile ground for private and public investments in climate-friendly infrastructure and renewable energy projects.
Large listed companies are under pressure to adopt ESG-aligned financing instruments:
- Saudi Arabia: Green bonds and sustainability-linked loans will dominate capital markets for listed companies. The Capital Market Authority (CMA) in its new strategy for 2024-2026, plans to develop the sukuk and debt instruments market, and will establish a regulatory framework for green and ESG-linked bonds. These instruments are already gaining prominence, supported by PIF-backed projects.
- UAE: Financial institutions are launching ESG-focused products like sustainability-linked debt., while Dubai and Abu Dhabi work to position themselves as regional hubs for green finance. The Central Bank of the UAE has announced a commitment to mobilise AED 1 trillion in sustainable finance by 2030.
- Oman: ESG-aligned lending for renewable energy projects will dominate the financial sector. The 2024 Oman Sustainable Finance Framework outlines how the government seeks to finance projects in areas such as climate change adaptation, renewable energy, pollution control, and biodiversity conservation.
- Bahrain: The financial sector will explore green sukuks and sustainability-linked bonds to drive sustainable investments.
- Qatar: The Qatar Financial Centre (QFC) became the first in the GCC to introduce a sustainable framework for sukuk and bonds in 2022. In 2024, Qatar issued $2.5bn in green bonds, funding environmentally friendly projects. Large enterprises in energy and infrastructure are leveraging green finance opportunities for expansion.
- Kuwait: Financial institutions are promoting ESG-aligned debt instruments to support sustainability efforts.
- Jordan: International development funds will play a key role in promoting sustainable finance for public infrastructure and renewable projects, offering opportunities for ESG-aligned public-private partnerships.
What you can do:
Collaborate with financial institutions to access ESG-linked funding, such as green sukuks or sustainability bonds.
7. Technology as an ESG Enabler
Digital transformation is becoming an enabler of ESG integration. Companies are adopting Artificial Intelligence (AI) and AI-powered tools to manage ESG data and for carbon accounting. Blockchain technologies are being deployed for supply chain transparency, and Internet of Things (IoT) devices are being used to optimise resource use.
These technologies are not only enhancing operational efficiency but also enabling businesses to meet stringent ESG reporting requirements.
Large enterprises are leveraging technology to enhance ESG performance. ESG reporting software like our very own AI-powered SQUARELY are enhancing communication and collaboration in the reporting process, revolutionising data collection, aggregation, analysis, and visualisation, and ensuring alignment with ESG frameworks and standards.
What you can do:
Invest in ESG tech solutions for monitoring, reporting, and improving sustainability performance.
8. Corporate Governance Transformation
Family businesses and large conglomerates, which dominate the GCC’s economic landscape, are undergoing governance reforms to meet investor expectations.
By introducing independent board members, establishing ESG committees, and improving risk management practices, these organisations are signaling a commitment to long-term value creation. Transparency and accountability are emerging as key priorities, particularly for firms preparing to attract foreign investments.
Governance reforms are a critical focus for large enterprises to ensure investor confidence.
What you can do:
Develop strong governance frameworks, ensuring ESG accountability and transparency at board levels.
9. Water Scarcity and Climate Resilience Leadership
Water security remains a critical challenge for the arid Middle East. Governments are prioritising investments in desalination plants, wastewater recycling, and advanced irrigation technologies to address growing demand. Businesses are also adopting climate-resilient practices, such as incorporating water-efficient technologies and designing buildings to withstand extreme temperatures. Regional water-sharing agreements and collaboration between public and private sectors will be crucial to mitigating climate-related risks in the region.
Water management innovations will be key to addressing resource scarcity and adapting to climate risks. Water-intensive industries are under pressure to lead on climate resilience. Investments in desalination and water reuse technologies are scaling up rapidly. Companies in agriculture and energy must invest in water reuse and desalination technologies. Developers and industrial players must adopt water-efficient solutions to support climate resilience. In Bahrain, efforts will focus on mitigating the impacts of rising sea levels on water and land resources.
What you can do:
Develop robust water management plans and invest in climate-resilient technologies.
10. Regional Collaboration on ESG
The Middle East is seeing a surge in cross-border initiatives to tackle shared sustainability challenges. Programmes like the Middle East Green Initiative are promoting collaboration on reforestation, renewable energy, and emissions reduction. GCC countries are pooling resources to drive large-scale projects, such as interconnected renewable energy grids and regional carbon markets. This collective approach not only boosts individual country efforts but also positions the Middle East as a global sustainability leader.
Cross-border collaboration on ESG will drive regional initiatives:
- Saudi Arabia: The Kingdom will lead regional initiatives like the Middle East Green Initiative, emphasising cross-border collaboration. Enterprises are likely to participate in regional sustainability partnerships.
- UAE: The UAE will continue leveraging its role as a regional convening power for sustainability summits and collaborative platforms. Businesses must engage in regional forums to share knowledge and position themselves as ESG leaders across the GCC.
- Oman: Regional projects, such as renewable energy grids, will foster stronger cooperation with GCC neighbours.
- Bahrain: The focus will be on joint ESG initiatives with Gulf counterparts in finance and industry. Collaborations on climate resilience projects will gain momentum.
- Jordan: Cross-border collaborations with GCC countries will address shared challenges like climate resilience and water scarcity.
What you can do:
Explore regional alliances and cross-border ESG projects to enhance reputation and impact.
The ESG landscape in the Middle East is evolving faster than ever, driven by a combination of regulatory developments, government ambitions, and global trends. At Sustainable Square, we’re committed to empowering businesses to lead the way in sustainability, ensuring they not only comply with emerging standards but also thrive as agents of positive change.
Thank you for reading The ESG Bulletin. See you soon, with the next edition of our monthly newsletter tackling the latest in global sustainability. If you would like to get in touch with our expert consultants to find out what Sustainable Square can do for your organisation's sustainability goals, reporting and disclosure please write to?us at [email protected].
