In the United Arab Emirates, the landscape of business is evolving rapidly. A new era is dawning, one where Environmental, Social, and Governance (ESG) considerations are no longer optional but essential. Whether you’re a business leader, investor, client, or regulator, the demand for greater transparency in ESG performance is becoming increasingly prevalent. But how can UAE organizations ensure that their ESG measurements and disclosures truly reflect their performance and set actionable targets for improvement?
While mandatory ESG reporting is not yet a requirement in the UAE, it is gaining momentum globally. With mandatory ESG reporting in some form is in place in regions like the European Union, Australia, Malaysia. the United Kingdom, UAE companies with international operations are impacted. The time is ripe for UAE businesses to implement comprehensive, integrated ESG reporting as a means of delivering value to investors, clients, and employees, all while preparing for potential future regulatory requirements.
According to 2022 Global CEO Outlook survey by one of the Big 4 consulting firm, 69% of CEOs see significant stakeholder demand for increased transparency and reporting on ESG matters (up from 58 percent in 2021). Next to this, 72 percent feel that stakeholder scrutiny regarding ESG issues — such as climate change and gender equality — will continue to accelerate. Additionally, more than one-third believe their organizations struggle to narrate a compelling ESG story.
Why ESG reporting? Who Benefits from ESG Reporting?
1. Investors: Private investment funds and pension funds are under increasing pressure to report on the sustainability of their portfolios. This places additional demands on corporations to provide overviews for consolidation. A report by BNP Paribas revealed that 60% of pension fund managers would only invest in companies that offer comprehensive ESG reporting.
2. Clients: As organizations focus on supply chain sustainability, ESG positions are becoming a key part of supplier due diligence. Requests for proposal (RFPs) now commonly include questions regarding a supplier’s environmental impact, human rights record, and anti-corruption policies.
3. Colleagues: Employees increasingly view ethical standards as a fundamental expectation from their employers. In a competitive labor market, companies that lack detailed ESG reporting may struggle to attract top talent.
4. Regulators: Across the globe, regulatory authorities are passing legislation requiring more comprehensive ESG disclosures.
A Journey, Not a Destination
ESG reporting is an ongoing journey, not a one-time task. To establish, implement, and maintain the necessary reports for ESG compliance, three phases of work are required.
1. Definition: Identifying the ESG standards that need to be met. This is driven by external stakeholders such as regulators, shareholders, lenders, clients, and internal functions, and governed by internal personnel such as head of sustainability.
2. Setup: To jump start your ESG journey and track your ESG performance and report it effectively, a easy to use yet complete ESG reporting platform such as Ecodrisil ESG has to set up immediately. Some organizations may require the use of consultants and auditors subsequently.
3. Maintenance: Consistently gathering data, tracking progress, and providing periodic reports on ESG performance using the ESG reporting tool such as Ecodrisil ESG. Ongoing engagement with external stakeholders, internal functions, and external support is critical.
Time to get onboard with ESG, sustainability
Many of you might have seen the sustainability video Apple released during their recent iPhone 15 event in Sept. ’23. One of the key take away here is, a company of Apple’s stature has to start using sustainability ESG as a competitive advantage.
A journey of a thousand miles begins with a single step. The important thing is to get started. There is no need for costly consulting services or complex climate accounting software to get started with your ESG, sustainability programs. Output from an essential materiality assessment, your initial ESG goals, strong executive sponsorship, one personnel with essential knowledge of ESG, sustainability to drive the program and a ESG performance and reporting tool is good enough to start for a large number of organisations.
How can Ecodrisil ESG Xpress, powered by AI help?
UAE businesses have a generational opportunity to take the initiative and implement a comprehensive, automated and easy to use ESG reporting platform to create added value to their investors and tap the strategic opportunity.
As a UAE-based company with R&D centre in India, Ecodrisil is at the forefront of the ESG transformation. Our platform, Ecodrisil ESG Xpress is powered by specialised AI-powered capabilities (ESGAI™), simplifying ESG reporting and ensuring compliance with global standards. By partnering with us, UAE organizations from all industry segments can efficiently navigate the journey towards comprehensive ESG reporting, empowering them to meet global regulations, attract investors, satisfy clients, and engage top talent.
Are you ready to embark on your ESG reporting journey? Let Ecodrisil be your guide, providing the tools, expertise, and support you need to make a lasting impact on your sustainability goals. With Ecodrisil ESG Xpress, your journey towards ESG compliance and reporting is not just an obligation; it’s a strategic opportunity.
To learn more about how Ecodrisil can take on the ESG reporting for your company, please contact us today.
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