First Abu Dhabi Bank’s 2024 Global Investment Outlook (GIO) Report: ‘Making a positive impact,’ forecasts that the economies of the UAE and Gulf countries will outpace the global forecast for 2024.
The report, now in its tenth edition and written by FAB’s industry experts, examines the current global economic and investment environment, with insights into key macroeconomic trends.
Alongside key economic indicators, the FAB report considers a range of trends shaping future growth prospects, including a focus on specific industries.
The report includes focused chapters on ESG, oil, Mena markets outlook, emerging markets outlook, global markets outlook, real estate, and developments in investment products and solutions.
FAB shared that it expects national and regional growth to be driven by demand in tourism, real estate, transportation, and manufacturing sectors.
It sees the UAE’s GDP expanding 3.7% in 2023 and 4% in 2024, and GCC’s by 3.4% this year – higher than the IMF’s global forecast of 3.1% and 2.1% for the US in 2024.
The GIO report also highlights what FAB believes are the five key risks for 2024:
- Artificial intelligence,
- The US elections,
- Tensions in the Middle East and Africa, climate change, and
- US-China relations.
The full report can be viewed here.
The Employment Standards Office (ESO) of the Qatar Financial Centre (QFC) recently hosted a Strategic Dialogue under the theme ‘The Importance of Just Transition and Investment in Human Capital to Promote Equality and Inclusivity of Labour Practice’.
Organised in cooperation with Gulf Sustain, the inaugural session explored the concept of ‘Just Transition’ and emphasised the importance of addressing environmental and social concerns in the transition to a more sustainable economy.
The role of the private sector in driving inclusive and equitable transition planning was also underlined here.
Speaking about the event, Yousuf Mohamed Al-Jaida, Chief Executive Officer of QFC, said: “This event exemplifies the QFC’s commitment to the UN Sustainable Development Goals and contributing to a future where progress goes hand in hand with inclusivity and sustainability. These values are ingrained in our strategic vision, and through initiatives that promote fairness and environmental stewardship, such as this Dialogue, we aim to take significant steps towards a brighter, more equitable tomorrow.”
The session saw participation from a number of different parties, including representatives from the QFC, Gulf Sustain, the International Labor Organisation (ILO), and the UNESCO Chair on Environmental Law and Sustainable Development and the United Nations (UN) Working Group on Business & Human Rights.
The parties discussed the ‘Just Transition and Environmental, Social and Governance (ESG) Frameworks through the Social Lens,’ and emphasised the “critical role” of fairness, equity, and inclusivity for workers in the transition towards more sustainable economies.
Damilola Olawuyi, the UNESCO Chair on Environmental Law and Sustainable Development at the Hamad Bin Khalifa University said that the ongoing transition “raises the” need for skilled, talented and motivated workforce capable of supporting a knowledge-based economy.
Adding: “By prioritising training and capacity building programmes, companies can be better prepared to align their practices and decision-making to advance the United Nations Guiding Principles on Business and Human Rights, as well as the Qatar National Vision 2030. This Dialogue is an important step in this regard, and we look forward to building on its evident success.”
Max Tuñón, Head of the ILO Doha Project Office, commented: “More than ever, the private sector has a vital role to play in transforming economies, safeguarding the environment, and ensuring human dignity in the workplace. We commend the efforts being made by QFC to champion new standards and practices, including due diligence within procurement processes. By giving more priority to sustainability and decent work, companies can contribute to the preservation of our planet and also promote social justice.”
A new survey from US audit, tax, and advisory firm KPMG LLP explores addressing the strategy execution gap in sustainability reporting.
The survey, which collected responses from the US (61 per cent), Europe (25 per cent), Canada and Mexico (12 per cent), Asia Pacific (1 per cent) and South America (1 per cent), found that as reporting requirements ramp up, organisations are set to spend more on ESG in the next three years.
However, while 90 per cent of the 550 companies surveyed planned to increase investment in this space in the coming three years, going toward dedicated ESG personnel (43 per cent), ESG-specific software (40 per cent) and employee training and education (38 per cent), only 33 per cent of companies plan for major restructuring to align sustainability goals with business strategy.
Further, the report found that insufficient resources or capacity to collaborate effectively (44 per cent) and internal silos and limited communication between departments (41 per cent) are the top two impediments to organisations integrating sustainability strategy into broader business goals.
Interestingly, many organisations believe they are ahead of their peers on ESG reporting (83 per cent), yet 47 per cent still use spreadsheets. Only 26 per cent used sustainability reporting platforms, and 37 per cent used specialised ESG software solutions.
Speaking on the results and the trends that emerged, KPMG US Climate Data & Technology Leader Tegan Keele, said: “Artificial intelligence and machine learning technologies can help organizations gain valuable insights from disparate data and make more informed decisions, but AI and ML are not a silver bullet for sustainability reporting or for setting a strategy that adds value to the business.”
Read the full report here.
While the hubbub around COP28 might have simmered down, sustainability remains a focal point in policy regionally, and at the beginning of this month, the UAE announced the extension of the ‘Year of Sustainability,’ with the aim of keeping climate action front and centre.
Indeed, action on sustainability within business is crucial to realising climate goals, and with a global shift towards sustainability and ESG reporting standardisation and regulation, businesses are moving towards greater ESG adoption and disclosure.
Dubai Chamber of Commerce recently polled the local business community to gain insight into how the landscape is evolving. ESG Mena takes a look at what they found.
Push towards ESG disclosure & standardisation in the MENA
Despite the politicisation of ESG, backlash in the US bubbling into Europe and beyond, and subsequent backsliding on sustainability, company awareness of the imperative to operate more responsibly is growing.
This is accompanied by growing greenwashing regulation and sustainability legislation. For example, the EU recently gave the green light to greenwashing rules, while in the US, California has legislated on climate reporting.
Movement toward standardisation is also being made, with the addition of more regulation in the ESG space too, including in the Middle East. This has been seen in the introduction of the GCC Unified Sustainability Disclosure Metrics and mandatory ESG reporting for listed companies in the UAE.
Reflecting this regional regulatory push toward sustainability and ESG, last year, research from PwC on business leaders in the Middle East found that business leaders are increasingly integrating ESG into company operations.
For example, 64 per cent of the companies polled from across different industries were found to have adopted a formal ESG strategy, while the number of companies with no ESG strategy was found to have halved.
Seventy per cent of those polled reported on their ESG impact, and 59 per cent had their reporting formally audited or assured.
Assessing how the situation is evolving in Dubai specifically, the Dubai Chamber of Commerce’s research revealed similar results.
Understanding the key drivers for ESG adoption
Dubai Chamber of Commerce, one of the three chambers operating under the umbrella of Dubai Chambers, through its ‘ESG Pulse Survey,’ assessed the adoption of ESG practices among family businesses, multinational companies, and private companies across four performance levels.
Here, ‘Comprehensive’ referred to the adoption of an integrated approach to ESG in all key areas; ‘solid’ indicated a systematic focus on some practices; ‘limited’ applied to using unsystematic methods to adopt certain practices; and ‘absent’ indicated the absence of a programme for ESG practices.
Conducted in the second half of 2023 by the Centre for Responsible Business, the report found that 26 per cent of companies had adopted a comprehensive approach, and 36 per cent had adopted ESG practices at a solid level. The same percentage of respondents had a limited adoption of ESG practices, and 8 per cent had not yet adopted a programme for ESG practices.
Interestingly, it found that companies are motivated to pursue ESG practices voluntarily based on the recognition that this is the right choice to “achieve the desired benefits.”
However, it was also highlighted that the publication of ESG reports remains in its infancy, with a lack of adequate data cited as a key driver here.
Indeed, globally, inadequate data has been highlighted as the “biggest obstacle” to ESG progress, and when it comes to data management, a recent report found that many companies still rely on manual ESG data collection and use spreadsheets.
Likewise, Dubai Chambers found that while many companies have commenced ESG reporting, almost a third do not have a dedicated department or team responsible for overseeing the implementation of ESG practices.
This is reflective of global trends, too, with a Thomson Reuters report finding that while 40 per cent of UK-based respondents have a dedicated ESG department or team, in North America, this drops to 24 per cent.
The green and ESG skills gap and a slowdown in ESG staff hiring in some regions are likely to be factors here.
The Dubai Chambers report also noted that some of the drivers and constraints of these practices affect SMEs more than large companies. Impact was also noted to vary according to the type of ownership.
Driving forward further action
Ultimately, the report concluded that there’s no one-size-fits-all approach and highlighted the importance of tailored measures. That said, it noted the adoption of standardised practices and the outsourcing of ESG reporting could be of huge benefit to companies struggling to navigate the ESG landscape.
It also stressed the importance of companies acquiring the appropriate ESG knowledge, validating the credibility of their sources, and developing systematic frameworks to measure the maturity of ESG practices.
Further, institutional frameworks and incentives from key stakeholders were noted as having the potential to accelerate ESG adoption among the Dubai business community.
This, it shared, also has a role in highlighting ways in which organisations could enhance their ESG data capabilities, including investing in technological solutions, training programmes, and data governance frameworks.
Speaking on the survey results to ESG Mena, His Excellency Mohammad Ali Rashed Lootah, President and CEO of Dubai Chambers, commented: “The ESG Pulse Survey has yielded valuable insights into the maturity of ESG within the Dubai business community, as well as the key drivers that motivate companies in the adoption of ESG practices. The highly encouraging results will help shape initiatives and tools aimed at further advancing the ESG agenda, including our comprehensive ESG Label programme.”
This program, it was shared, has been developed in line with leading global frameworks to enable companies in Dubai to measure, benchmark, and report their goals, achievements, and activities.
His Excellency added: “Dubai Chambers remains committed to accelerating the adoption of responsible business practices throughout the private sector to drive positive impact and further strengthen the emirate’s position as a global leader in the field of ESG.”
Emirates NBD Bank PJSC has become the first financial institution to benefit from an ESG fee waiver launched by the Dubai Financial Services Authority (DFSA).
This fee waiver was announced during COP28 by DFSA Chief Executive Ian Johnston, and applies to issuers wishing to list sustainability-related debt securities in the Dubai International Financial Centre (DIFC) throughout 2024.
Speaking about this, DFSA Chief Executive Ian Johnston said: “The DFSA recognises the pivotal role that financial institutions play in promoting sustainability and addressing environmental and social challenges. By participating in the fee waiver, institutions are taking a proactive step towards adopting more sustainable financial practices.”
The DFSA shared that it is seeing more firms submit applications to become beneficiaries of the fee waiver and is processing pending applications.
All new and repeat issuers that make a relevant application to the DFSA are eligible.
The pledges made at last year’s United Nations Climate Change Conference (COP28) in Dubai reflect the growing political will to tackle climate change head on and in an equitable way. But while governments are taking the lead in accelerating the green transition, they cannot finance it alone. Fortunately, the appetite for sustainable investment is greater than ever: environmental, social, and governance (ESG) assets are expected to reach $50 trillion in 2025. The difficulty lies in matching investors with viable green projects.
Achieving the global goal of net-zero emissions by 2050 requires coordinated investment on a scale never before seen. Goldman Sachs recently estimated that roughly $4 trillion – 4% of global GDP – in annual clean-energy investment will be needed to reach this target every year for the next decade. Yet, as it stands, only $1.1 trillion is being invested in decarbonization each year, with a focus on lower-risk, subsidy-driven technologies such as wind and solar generation and electric vehicles (EVs).
Given this shortfall, and governments’ limited financial resources, the private sector must find innovative ways to attract investment in projects that will slow global warming and ensure a just energy transition for all. Success will depend on a strong incentive to deliver results for the climate and the economy; sufficient investment capital; and the development of an ecosystem of technical, finance, and operational specialists with the skills needed to execute the net-zero transition – a crucial but underappreciated variable.
Similar ecosystems in other sectors, such as biotech, have shown how a coordinated group of experts working together closely can help accelerate progress. While such a group has yet to form for green industry, owing to its fragmentation, all the ingredients are there.
A crucial part of mobilizing new climate-finance flows is identifying alternative investment options that are attractive to a wide range of investors, both geographically and in terms of size. Today’s biggest investors focus too much on large-scale commitments and high-impact headlines. For example, news from the recent COP28 summit centered on multibillion-dollar pledges from massive private investment groups such as Brookfield, Apollo, and TPG, whose combined assets under management total around $12 trillion.
The funding requirements for green projects, including in clean energy (hydrogen, carbon sequestration, biogas, battery storage, waste recycling, and more), transport (EVs), agri-tech, and hard-to-abate heavy industries, are growing rapidly. But these projects are becoming divided between large, government-led infrastructure initiatives and smaller to mid-size ones driven by the private sector. Financing the full spectrum is essential to tackle climate change effectively.
This is where digital platforms can help. By matching investors with green projects in the smaller to mid-size category (valued below $250 million for an individual project), they could bring greater visibility to initiatives of this size while also indicating their bankability. Furthermore, such platforms should facilitate access to expert service providers – from law firms to technical advisers and ESG consultants – who can support the transaction and the project more generally, and should be facilitated by a drive to standardize documentation. Previous efforts have centered on crowdfunding micro-projects and pushing the public sector to take the lead, and thus never attained the critical mass needed for a functioning ecosystem.
One new digital platform that could help reach this critical mass is VerdEx, which is launching this month and has strategic partners around the world. By shining a light on bankable projects that require funding and offering an ecosystem of relevant specialists, VerdEx aims to connect institutional investors to green projects in the smaller to mid-size category and reduce friction, which would lower overall financing costs. Moreover, VerdEx will invest a portion of its revenue in an impact fund to help deliver a just and equitable energy transition.
Efforts like this will be critical to attracting a wider range of institutional investors to less gargantuan, but no less important, green projects. With governments and private investment funds remaining focused on big-ticket projects, this type of matchmaking will help us use all avenues available to reduce global emissions and meet our climate commitments.
Emma FitzGerald, former CEO of Puma Energy, Co-Chair of the World Economic Forum’s Global Future Council on the Future of Energy Transition, independent non-executive director at various companies supporting the energy transition, and mentor to several cleantech firms, including VerdEx.
© Project Syndicate 1995–2024
Instinctif Partners, an EMEA communications consultancy, has announced the appointment of Alaa Badawi as Associate Partner in Sustainability at Instinctif Partners MENA.
Joining from Ernst and Young MENA, Badawi will support and advise clients on navigating their sustainability journeys.
Instinctif Partners shared that Badawi will integrate sustainability best practices into Instinctif’s key sectors, collaborating closely with the Investor Relations, Corporate Communications, Public Policy and Corporate Reporting teams.
Samantha Bartel, MENA CEO and Managing Partner at Instinctif Partners MENA, commented: “Alaa’s appointment is a strategic move for us to ensure we continue providing the best advisory services for our listed clients as well as growth companies seeking sustainable business solutions in the MENA region. Alaa’s experience and passion for sustainable practices make him a valuable addition to our team.”
A Mechanical Engineering graduate from Lebanese American University (LAU) and a Certified Energy Manager (CEM) accredited by the Association of Energy Engineers (AEE), Badawi’s most recent role was as a Senior Consultant with Ernst and Young (EY).
Badawi brings with him extensive regional experience spanning Saudi Arabia, UAE, Qatar, Lebanon, and India, the company shared.
Badawi said: “This is an exciting time to join Instinctif Partners MENA to support our impressive client base in articulating and achieving their sustainability ambitions. With all the progress and commitments in the region, I am looking forward to scaling up our sustainability advisory service in the pursuit of building new and better growth paths for Instinctif Partners MENA. I’m excited to be a part of a team where I can see a clear regional and global commitment from leadership to drive the agenda and help develop a sustainable future.”
Helen Dodd, Head of Reinventing Responsibility at Instinctif Partners, added: “Alaa’s appointment reflects our deep commitment to helping our clients deliver positive social, environmental, and commercial impact in the MENA region and beyond. He brings a wealth of knowledge and best practice to help businesses navigate the rapidly changing ESG landscape and to put people and the planet at the centre of their strategies.”
Dun & Bradstreet has announced the incorporation of ESG RegisteredTM into its product catalogue in Qatar, aimed at assisting companies in showcasing their Environment, Social, and Governance (ESG) credentials on a global level.
The offering, built from globally recognised standards, will see Dun & Bradstreet recognise companies committed to sustainable business practices and award certificates with ESG ratings.
According to the company, the seal ensures transparency and sustainability in business functions and enables businesses to understand their ESG performance, identify risks, and overcome ESG-related gaps.
Commenting on this new offering, Dun & Bradstreet Qatar, Country Director, George Hajji said: “ESG RegisteredTM acknowledges companies that are spearheading sustainable business practices by adhering to Environmental, Social, and Governance (ESG) guidelines. Through this product, businesses are provided with a badge that is a testament to their promise of responsible investment. Equally beneficial is the ESG ranking awarded as part of this solution, which makes firms understand their ESG performance as well as areas that need improvement.
“With Qatar gradually transforming into a financial and business hub, I am confident that ESG RegisteredTM will benefit companies in showcasing their ESG credentials and translating their sustainable business practices into an advantage,” Hajji added.
“Given robust data collection and wide coverage of companies by Dun & Bradstreet, businesses availing ESG RegisteredTM will be able to access the comprehensive D&B database that will assist them in growth and partnerships,” said Hajji.