Paradigm shifts in corporate sustainability to a new interesting era of ESG.

The management of environmental, social and governance (ESG factors), which ultimately affect the financial performance are the key factors under increased considerations of investors these days.

The demand for ESG reporting is gaining momentum day by day and among the most prominent factors are

• water and waste management,
• pollution,
• energy consumption and
• resource utilization.

The companies’ employees, suppliers and host communities and their relationship management are the social factors. Similarly, the board and committees, internal audit and risks, shareholder’s right and executive compensation are governance factors.

With the increased reporting requirements in these areas, investors are more interested in this ESG strategy of the companies to make better informed decisions. As "responsible decision making" is gaining momentum the financial and non-financial rating agencies are providing more importance to these factors in the ratings.

UAE a financial hub, is on the same line as the world on sustainability reporting. The country’s securities & commodities authority issued a circular in April 2021 to submit sustainability reports by June and every year not later than 90 days and the AGM whichever is earlier.

The listed companies must be compliant with global reporting initiative (GRI) a sustainability standard and any other requirements issued by the relevant stock exchange. Some free zone authorities in UAE have joined sustainable stock exchange initiative by the UN.

These authorities have issued guidelines for listed companies to support them in ESG reporting. Nasdaq Dubai issue bonds and sukuk that meet the global standards of ESG requirements. A famous global survey shows that GULF (90%) is lagging in sustainability reporting from North America (59%).

The trend is towards more disclosure and UAE is leading the GULF.

The steps taken by UAE towards more disclosure is influencing remaining GULF countries to make more ESG disclosures.?