March 2025

Environmental, Social, and Governance (ESG) principles have evolved from a corporate responsibility framework into a core component of business and investment decision-making.

These principles serve as benchmarks for evaluating an organisation’s environmental impact, social policies, and governance structures. ESG compliance has increasingly become a requirement for global firms seeking investment and operational legitimacy.

Qatar, in its pursuit of economic transformation, has placed sustainability at the centre of its long-term vision. The country is adapting to evolving ESG regulations, which, while posing certain challenges, also provide opportunities for attracting investment and strengthening international credibility. This article explores Qatar’s ESG initiatives, the obstacles it faces, and the strategic importance of compliance.

ESG Implementation in Qatar

Over the past decade, Qatar’s economy has become deeply interconnected with global markets. This is evident in the international prominence of Al Jazeera and Qatar’s extensive oil and gas exports. As the state moves towards a more diversified and sustainable economic model, it is following a trajectory similar to its Gulf neighbours, aiming to establish a reputation as a leader in sustainability.

The groundwork for ESG adoption was laid in the 2010s. ESG principles have their origins in the Sullivan Code, initially introduced by General Motors as an ethical business framework for dealing with apartheid-era South Africa. Over time, this concept expanded into broader corporate social responsibility (CSR) guidelines, eventually forming what is now recognised as ESG standards.

For Qatar, the primary focus has been on environmental sustainability. Since 2009, the Planning and Statistics Authority (PSA) has collected and published sustainable development indicators to monitor progress. To promote sustainability-driven investment, Qatar has introduced ESG frameworks, including the Qatar Stock Exchange’s participation in the United Nations Sustainable Stock Exchanges Initiative (SSEI), the introduction of ESG Guidance, and the creation of the country’s first sustainability platform and ESG tradable index.

An important player in this national transformation is Qatar Foundation (QF), a non-profit organisation that has been central to advancing sustainability through education, research, and community development. Its initiatives, including the creation of Education City and support for green innovation, directly support Qatar’s ESG goals.

Further underlining this commitment, QF is hosting the second edition of the Earthna Summit under the theme “Building our Legacy: Sustainability, Innovation and Traditional Knowledge.” The summit focuses on advancing sustainability in hot and arid climates by drawing upon Qatar’s rich cultural heritage and distinct ecosystems.

The state’s commitment to climate action is enshrined in its National Vision 2030 and its two National Development Strategies, which prioritise environmental protection and resilience-building. In 2021, Qatar launched the National Climate Change Action Plan (NCCAP), developed with input from over 50 domestic organisations, further reinforcing its stance on climate adaptation and emissions reduction.

However, while these initiatives highlight Qatar’s progress, ESG success is also about perception. International investment firms increasingly evaluate corporate ESG strategies, with institutions such as JPMorgan Chase, Wells Fargo, and Goldman Sachs incorporating ESG factors into their financial analyses. ESG compliance has thus become a crucial determinant of Qatar’s ability to attract and retain investment.

The FIFA World Cup and ESG Commitments

The 2022 FIFA World Cup served as a global showcase of Qatar’s ESG commitments. The tournament was heavily marketed as the first ‘carbon-neutral’ World Cup, a claim that later faced scrutiny. Nonetheless, Qatar leveraged the event to demonstrate its sustainability initiatives, including green construction practices, renewable energy use, and emissions reduction strategies.

Sporting events have increasingly been used as economic diversification tools across the Gulf. Saudi Arabia and the UAE have successfully hosted major sporting franchises, including Formula One, UFC, and professional boxing, along with high-profile entertainment events such as WWE. Saudi Arabia, in particular, has capitalised on stagnation in Western sports markets, hosting historic boxing matches and reinvigorating the sport’s global presence.

Qatar is now following this model, with the World Cup serving as a milestone in its broader strategy. This transition towards sports promotion represents a long-term economic opportunity that is more sustainable than fossil fuel dependence. However, Qatar’s ESG strategy must extend beyond major sporting events to maintain credibility and demonstrate lasting impact.

The Future of ESG in Qatar

Beyond sports and global branding efforts, Qatar has implemented several domestic initiatives to advance its ESG agenda. The development of “smart cities” like Msheireb and Lusail, which prioritise sustainability and emissions reduction, is a major step forward.

Additionally, the country has introduced its first green bonds, established the Ministry of Environment and Climate Change (MECC) in 2021, and developed large-scale renewable energy projects such as the 800MW Al Kharsaah Solar Power Plant, which supplies around 10% of Qatar’s peak electricity demand.

To sustain this momentum, Qatar may need to introduce a structured ESG assessment framework to monitor corporate compliance. Offering incentives such as tax benefits, grants, and investment subsidies could further encourage businesses to align with ESG principles. The UAE’s ‘Year of Sustainability’ initiative last year provides a model for Qatar to potentially emulate.

A successful transition to a sustainable economy will also require greater public-private collaboration, a strategy already being employed by other GCC states. Additionally, establishing a national ESG standard tailored to Qatar’s unique socio-economic environment would enhance long-term resilience and ensure that sustainability goals remain adaptable to local conditions.

Investment, ESG Ratings, and Global Influence

ESG scores have become critical for securing international investment. Firms that fail to meet ESG expectations often face reduced investment opportunities or divestment risks. While this process is not always explicit, investment firms can exert pressure by gradually shifting capital away from companies with low ESG ratings. Some critics argue that this form of financial coercion allows global firms to impose corporate governance standards on sovereign states without formal legislation.

In Qatar’s case, aligning with ESG principles will be necessary to maintain access to global capital markets. This is especially relevant as international financial institutions increasingly integrate ESG compliance into risk assessments and lending decisions.

However, Qatar’s success will not simply depend on ESG adoption—it will require meaningful, measurable progress. If ESG frameworks are perceived as mere public relations exercises, investor confidence could weaken. Therefore, the effectiveness of Qatar’s ESG strategy will ultimately be judged on its ability to translate policies into tangible, long-term impact.

Qatar’s ESG journey is about more than just regulatory compliance—it is a strategic necessity for economic diversification, investment attraction, and global positioning. The country has taken significant steps to align with international sustainability standards, but challenges remain in balancing ESG expectations with local economic and social priorities.

As Qatar continues to implement ESG initiatives, its ability to maintain credibility will depend on the effectiveness and transparency of its policies. Whether it can successfully navigate the intersection of investment, governance, and cultural considerations will determine the long-term success of its sustainability strategy.

By: Omar Ahmed

Following the ceremonial end of the ‘Year of Sustainability’, 2025 will be marked as the ‘Year of Community’. It expands upon the central planning trend set previously to drive through the effectiveness new policies and initiatives for holistic change in the UAE.

As one may judge from the name of the programme, the ‘Year of Community’ focuses on bringing about social change. The primary goal of the programme is to mould the Emirati citizenry into individuals capable of navigating the rest of the 21st century ahead of the rest of the world.

For the first time, the UAE is launching a society-wide initiative to recognise the cultural diversity amongst its population, composed not only of Emirati Arabs but also of non-Arab populations arriving as migrant workers. In its scope, the initiative is certainly one of a kind.

The Purpose Behind the Initiative

The initiative was announced on X by HH Sheikh Mohammed Bin Zayed, President of the United Arab Emirates on 26 January 2025. The UAE has been using yearly themes to direct projects, initiatives, and policy choices throughout its seven emirates since 2016.

The shift to the ‘Year of Community’ in 2025 is a comprehensive strategy for the advancement of the country, acknowledging the importance of social harmony just as much as environmental sustainability.

Why is this necessary? Well, one would have to take a good look at the recent history of the UAE. The image of the Emirates as a modest tribal society is still within the living memories of its senior citizens who grew up within its folds. The immediate generation after that was brought up by their parents and older siblings who experienced the Emirati tribal society first-hand.

The extraction of oil and the building of a robust export-oriented economy from it rapidly changed the country. Talking about the true scale of the change in this way would be somewhat of an understatement.

The UAE, along with the rest of the Gulf, changed almost as rapidly as Japan did during its Meiji Restoration period. It is said that 200 years of development were covered in the span of 20 years there. The UAE’s transformation took place on a similar note.

From Tribal Society to Global Economy

Transforming from a collection of tribal fishing villages to a highly developed multicultural economy has come with its fair share of challenges. The Year of Community initiative is a wholehearted drive to embrace the change and recognise the value brought by migrant communities, particularly the Indian migrant community.

Of particular note are the international metropolises of Dubai and Abu Dhabi, both of which have long been home to skilled expatriates and entrepreneurs from across the world. All combined, the prevalence of yet another social issue has been recognised by the federal government.

This is the generational gap between Emiratis. Such rapid change over the course of decades has led to two distinct threads among the old and the young. The UAE in its current form makes little sense to many among the oldest of the population, given how rapidly Emirati lifestyles had to adapt to change, as well as the demographic shifts.

Generational Gaps and Social Cohesion

To put it simply, the neighbourhoods are simply not what they used to be. The youth, on the other hand, have been said to be caught up in the whirlwind of economic success, leading to excess materialism in the eyes of some critics.

“The government is doing its best to promote opportunities and productivity amongst the country’s youth but we also need frank and open communication from the parents,” UAE footballer Hasan Murad said in 2018.

“We are a small nation with a conservative culture but we have seen our country modernise very quickly and I’m afraid our youths think they are modern only because they live in it. What I see happening today is youths’ sleeping half the day away because they think everything is easy. The truth is, it was people’s hard work that built what they are now taking for granted and it is the youths’ job to carry this development even further.”

He emphasised his point with the question: “If technology was to collapse, what would they do?”

While the Year of Community initiative in 2025 does not aim to train Emirati youth to live in fishing villages, it does aim to reduce the distance between the old and the young by engendering an understanding of what it means to be an Emirati.

Social cohesion is the motto of the Year of Community in all of its senses.

Economic Diversification and Urban Planning

In light of the UAE’s ambitious goal to diversify the economy, the future will consist of skilled technicians, experts, managers, and workers from around the world working in various sectors. They will become long-term residents, even on a completely permanent basis.

The UAE has some experience with such arrivals, mainly engineers and entrepreneurs coming from places such as India, Pakistan, Bangladesh, Turkiye, Russia, and beyond. However, the intake in the future may far outstrip this.

What was once a popular destination for temporary foreign workers is now becoming a favourable setting for those wishing to make the country their permanent home. The population centres of the country can benefit greatly from concentrated efforts in urban regeneration.

The Role of Urban Regeneration

Urban regeneration is fundamentally about placing communities at the centre of all urban planning decisions. Its main goal is to build a city that proves to be liveable and convenient enough to ensure that its citizens remain as permanent residents. It creates the bedrock for urban civic cultures to develop. Existing cities certainly benefit from urban regeneration through focused redevelopment and redesign initiatives.

These new grounds in urban management and planning are made possible by leveraging advanced scientific perspectives in city design and architecture, along with astute use of data. While such initiatives have not been announced for the Year of Community, it remains true that city design and infrastructure play just as much of a role in community-building as cultural attitudes and perspectives.

Damac Properties chairman Hussein Sajwani states the following about Dubai:

“What is unique to Dubai is the dynamic energy of its communities with their diverse culture and backgrounds. That’s why developers must understand that meeting the rising housing demands is not just about creating units, but about transforming neighbourhoods and communities. Moreover, it’s about building an environment that is fit for the future, keeping environmental and social considerations at the heart of all projects and renewal plans.”

Future Directions of the Year of Community

For now, what can be known with some reliability is that future Year of Community initiatives will focus on fostering a culture of volunteerism and strengthening the distinct Emirati political identity that the country has been presenting on the world stage. Emiratis are no longer simply just tribal Arabs; they now have a demographic profile that is truly unique in its diversity.

Indeed, the UAE is still busy with nation-building. Yet, any country that experiences such holistic change within a short period of time would do well to revitalise its societies.

With the year just starting, the initiative has also just begun. Its true effects may only be seen later in the year. If the statistics regarding the previous Year of Sustainability are to be believed, then it seems that the UAE has a solid template for engendering social change.

The UAE, along with other Gulf states, differs from other developed economies as it has had to rapidly transform from an earlier technological and social level to being a foremost global champion of its respective industries. It must be emphasised that a country such as the UAE, which has had to rapidly transform itself, must grapple honestly with the effects of such a change within its social fabric.

Within its nature as a central government-organised effort, it is setting new dimensions and a template to follow. The next energy transition is likely to be disruptive to many societies around the world, requiring out-of-the-box thinking and bold initiatives across large sections of their respective populations. Holding social cohesion together through such changes is of paramount importance.

By: Omar Ahmed

Much has been said in the news for years about Saudi Arabia’s economic diversification projects, and this discussion continues today. These projects span various sectors, including sports, information technology, and renewable energy solutions. However, one sector that has largely flown under the radar is consultancy. Here, Saudi Arabia’s consultancy market may be undergoing a quiet revolution.

The country’s economic growth has been nothing short of explosive, reaching a peak of 38% in 2022 alone. It has been open season for consultancy firms setting up in the Kingdom, yet seismic changes now seem imminent. What is driving this shift? And how is the traditional consultancy landscape evolving as a result?

The Boom

The consulting boom, which began in the late 2010s and accelerated after the COVID crisis, was a direct consequence of Saudi Arabia’s decarbonisation plans. Governments in the region have been investing heavily in non-oil sectors such as renewable energy, tourism, technology, and healthcare. Ambitious initiatives like the UAE’s Centennial 2071 and Saudi Arabia’s Vision 2030 aim to establish knowledge-based, sustainable economies.

As a result, companies and government organisations required—and continue to require—professional expertise to implement necessary changes, restructure operations, and explore new revenue streams. Demand soared for consulting firms specialising in strategy, financial planning, digital transformation, and regulatory compliance. Consulting contracts steadily increased as firms played a critical role in helping organisations manage risk, plan investments, and adapt economic policies.

Leading global firms such as McKinsey & Company, Boston Consulting Group (BCG), Deloitte, and PwC swiftly established strong footholds in the Gulf Cooperation Council (GCC) markets. Anyone following business developments would recognise that these firms have been deeply involved in government projects, corporate strategy, and infrastructure development. Given Saudi Arabia’s significant central government role in its economy, these firms have worked closely with the highest levels of government.

Saudi Arabia and the UAE remain the two most active consultancy markets, with Riyadh and Dubai serving as key commercial hubs. Top-tier consulting firms seeking lucrative projects have been drawn to these cities. Saudi Arabia’s rapid economic development and Dubai’s free zones and investment-friendly regulations have created fertile ground for consulting businesses to thrive. Consequently, the sector saw staggering growth of 13.8% in 2023.

The Bust?

By 2022, foreign firms had nearly monopolised the Saudi and Emirati consultancy markets. However, in 2025, Saudi authorities barred PwC from securing further contracts with the country’s Public Investment Fund (PIF).

The decision has not been publicly explained, creating uncertainty. Those firms that entered the Saudi market alongside PwC are now reassessing their positions, wary of potential missteps that may have triggered this restriction.

Technology and data sovereignty have also become pressing concerns. Historically, sensitive state data has been accessible to foreign consultancy firms, but Riyadh has prioritised tightening control. The Saudi Data and Artificial Intelligence Authority is drafting stricter regulations for data processing and storage, particularly for firms handling work related to natural resources or infrastructure.

This ban has reignited debates over foreign consultancy firms’ dominance. Many Saudis argue that these firms’ near-monopoly stifles local opportunities and knowledge development. This sentiment aligns with a broader push for economic self-sufficiency and domestic talent cultivation.

Intensifying Competition

Budget constraints, regulatory tightening, and stricter hiring qualifications are forcing consultants out of their comfort zones. The “Saudization” of the consultancy sector, aimed at nurturing local players, aligns with cost-cutting measures and enhanced data security. This shift has been in motion for some time, as evidenced by two key developments:

1. In October 2022, Saudi Arabia’s Ministry of Human Resources and Social Development mandated that by March 2024, at least 40% of employees in the consultancy sector must be Saudi nationals. This policy targets key professions, including financial advisory specialists, business consultants, cybersecurity experts, project managers, and engineers.

• By mid-2024, industry observers noted a steady emergence of new Saudi consulting firms. While this transition has required significant investment in training, it ensures a reliable pool of domestic firms capable of competing with global players.

A natural progression is unfolding: Saudi nationals working in international consultancy firms gain expertise and later transfer their knowledge to domestic firms. These homegrown firms, in turn, train new hires, mirroring the development model seen in China’s heavy industries during the mid-to-late 20th century.

Recruitment specialist Azeem Zainulbhai commented in 2022 on the 40% rule:

“This move means less reliance on foreign experts in key fields like finance, project management, and cybersecurity. Essentially, it’s about creating more jobs for Saudis in critical, high-paying sectors and ensuring they are well-trained for these roles. The ultimate goal is to enhance project management and business practices tailored to Saudi culture and regulations, stimulate private sector growth, and build a knowledge-based economy—ultimately making companies more competitive globally.”

This nationalistic drive has merit. Skilled local professionals will be essential to sustain the economic transformation already underway in Saudi Arabia.

Economic Pressures and Strategic Shifts

Another factor influencing Saudi Arabia’s stance on consultancy is the recent decline in global oil prices, which many analysts predict will persist. As a major oil exporter, Saudi Arabia faces reduced revenue, leading to tighter government budgets. Against this backdrop, the Public Investment Fund implemented the PwC ban, though its precise rationale remains unclear. Whether the full reasoning will ever be disclosed remains to be seen.

The ban has thus rekindled discussions about international consultancies’ dominance. Many Saudis are upset about what they perceive to be a monopoly by these companies, claiming that it hinders the growth of local possibilities and knowledge. This opinion supports a more general demand for economic independence and the development of domestic talent.

The Future of Consultancy in Saudi Arabia

Consultancy is an often-overlooked industry, yet it plays a crucial role across all economic sectors. Both public and private entities rely on consultants for strategic direction, whether in renewable energy, infrastructure, defence, or beyond.

The advice provided by consultants directly influences policy and investment decisions, making the fees they command particularly significant. However, excessive reliance on foreign consultants—especially when they charge exorbitant fees—poses challenges.

Moreover, domestic consultants inherently possess a deeper understanding of national regulations, culture, and market conditions. This, of course, assumes they can match the quality and expertise of their foreign counterparts. Saudi Arabia’s drive to curtail foreign consultancy dominance is not merely about economic nationalism.

It is a strategic effort to foster an environment where local firms can thrive. By reducing dependence on international firms and nurturing homegrown talent, Saudi Arabia is working to build a more self-sufficient and competitive consultancy market.

By: Omar Ahmed