The MENA region is rapidly advancing in its sustainability journey. As climate risks intensify and global regulations shift, businesses must act decisively to future-proof their operations. From catastrophic floods to soaring temperatures, the challenges are real—but so are the opportunities.
On the side-lines of CERAWeek by S&P Global, ESG MENA spoke with Amy Barnes, Head of Climate and Sustainability Strategy at Marsh and a member of the Marsh McLennan Climate Group, and Dubai-based Guy Bessis, Global Head of Sales for Marsh Energy & Power, to discuss the impact of recent regulatory changes, the importance of risk management, and the future of ESG adoption in the Middle East.
- How do you see the impact of the European Parliament’s decision on the Omnibus Directive, especially given the Middle East’s alignment with global sustainability policies?
Amy Barnes: Many of our clients have made it clear that this decision will not change their sustainability strategies. For companies that have already embedded sustainability into their business models, regulatory shifts like these mainly affect reporting, not their core operations. Sustainability is not just about compliance—it’s about future readiness and operational efficiency.
That said, there is some disappointment that the directive now applies only to the largest companies, meaning smaller businesses may feel less pressure to take action. However, the leading companies in the region are continuing to invest in sustainability, regardless of the regulatory landscape.
- The Middle East has recently faced catastrophic climate events, including floods in Dubai. How is Marsh helping businesses prepare for and mitigate such risks?
Amy: Risk modelling is at the heart of what we do. Many companies rely on insurance to ensure financial resilience, but we also help them access and manage risks before disasters strike. For example, after the Dubai floods, we worked with clients to understand their vulnerabilities and take preventive measures, whether that involved infrastructure improvements or operational adjustments. Prevention is just as critical as response.
Guy Bessis: The Dubai floods on 16 April, 2024, were a major wake-up call. They underscored the need for long-term risk transfer solutions and climate resilience. The Middle East has traditionally viewed itself as somewhat immune to climate-related risks, but these events highlight the urgency of addressing resilience strategies.
Ahead of COP28, we collaborated with DEWA [Dubai Electricity & Water Authority] on climate resilience strategies for the Mohammed bin Rashid Al Maktoum Solar Park. This proactive approach helped mitigate the flood’s impact and facilitated faster insurance pay-outs. The region’s leadership is committed to sustainability and resilience, and we see companies moving forward even without stringent regulatory pressure.
- Insurance contracts in the Middle East are typically renewed annually, but you’ve been advocating for longer-term agreements. Why is this important?
Amy: One of the key challenges we see in the insurance industry is the mismatch between investment horizons and insurance contracts. Many energy transition projects require financing over a 20- to 30-year period, yet insurance is typically renewed on a 12-month basis. We are actively working to encourage insurers to offer longer-term agreements—such as 10-year contracts—to provide greater certainty for investors and businesses. This shift is essential to unlocking more capital for clean energy projects in the region.
- How can insurance play a greater role in driving ESG adoption in the Middle East, particularly in sectors that have been slow to engage?
Amy: The intersection of sustainability and insurance is all about risk assessment. Companies with strong ESG performance often have lower operational risks, whether in worker safety, governance, or environmental impact. However, in the Middle East, we see banks and investors hesitant to incorporate ESG into their financial decisions. That needs to change.
We’ve found that companies with strong ESG policies tend to experience fewer workplace accidents and governance-related losses. Insurers recognise this and price risk accordingly. However, many Middle Eastern insurers are still hesitant to differentiate pricing based on ESG performance, in part because the data is complex. Over time, as more companies integrate ESG principles, insurers will need to evolve their approach as well.
- The Middle East, particularly the Gulf, has been a major fossil fuel producer. Yet, it is now leading the world in the energy transition. How do you view this paradox?
Guy: It’s fascinating that the very heart of the hydrocarbon industry—the Gulf—is becoming the engine of the energy transition. The leadership in this region is making bold, long-term investments in renewables, carbon capture, and hydrogen, even in the absence of strict regulatory frameworks. Companies here aren’t just responding to compliance; they are shaping the future of energy on a global scale.
Quote of the Month: “It’s fascinating that the very heart of the hydrocarbon industry—the Gulf—is becoming the engine of the energy transition.” – Guy Bessis, Marsh
- Why do many multinational companies in the Middle East still rely on global ESG frameworks rather than developing region-specific policies?
Amy: Most global ESG policies are designed for consistency across markets. That can create challenges when applying them to regions like the Middle East, where priorities may differ. Companies don’t want to create region-specific ESG policies because it complicates investor relations and operations.
Guy: That said, the UAE is leading the charge in ESG policy development. Many companies here are setting their own benchmarks rather than waiting for regulations to dictate action. The Emirates are shaping best practices that will likely influence the broader region in the coming years.
- What are your next priorities in the Middle East regarding ESG and sustainability?
Amy: We have two key focus areas. First, we want to help businesses improve climate resilience—ensuring that assets are protected against extreme weather events and that disruptions are minimised. Second, we aim to support the vast capital investments in decarbonisation by helping companies de-risk projects from the start. Insurance plays a crucial role in making these projects viable, particularly in securing financing.
Guy: Another critical focus is helping Middle Eastern capital flow into cleaner energy investments in Africa. Projects led by companies like Masdar are pioneering renewable energy in the region, but they need support in risk management. Addressing long-term risks—whether related to climate, geopolitical stability, or financing—will be crucial for sustaining these investments over the next 20 to 30 years.
- How is Marsh working to improve ESG and climate literacy among its clients?
Amy: Education is a huge part of our strategy. ESG and climate change can be overwhelming topics, and not everyone needs to understand the technical details. We focus on making the key concepts accessible—helping clients understand why ESG matters and what actions they can take to reduce risk and improve resilience.
Guy: Beyond education, we also aim to shift perceptions about investing in emerging markets. Many companies are hesitant about Africa due to perceived risks, but these risks can be managed. With the right financial tools, we can enable more investment in sustainable projects across the continent.
As the MENA continues to accelerate its ESG transformation, the role of insurance and risk management in supporting sustainability efforts cannot be overstated. Marsh is at the forefront of ensuring that businesses are not only protected against climate risks but are also positioned to seize new opportunities in the transition to a more sustainable economy.