PwC Middle East launched a new report titled ‘Reimagining our region through ESG’, which explores the maturity of ESG in the Middle East using insights drawn from a survey of top executives with ESG responsibilities operating in the region. Driven by the conviction that Environmental, Social and Governance (ESG) principles are essential to the continued development of the Middle East and have the potential to provide world-leading competitive advantage, the report provides insight into the current adoption of ESG.
The report details three critical areas that need to be addressed to unlock the potential of ESG in the region: strategic ESG alignment, readiness to change and adapt, and the need for greater government direction and more extensive collaboration with the private sector.
The findings reveal significant alignment between national and corporate priorities, but also some gaps (particularly in the area of water security and biodiversity), and indicate there is still a lack of maturity in the adoption of ESG strategies in the private sector. One evidence of this is that only 18% of respondents have systems and capabilities in place to cover the full suite of ESG activities. This suggests that many companies in the region are at the beginning of their ESG journey.
Executives who responded expressed their desire to have clear policies and direction from the public sector to assist their ESG adoption efforts. They also stressed the importance of having standard metrics available to assess their ESG performance and gain insight into the return on their investments.
Commenting on the report, Abdelkhaleq Ahmad, PwC Middle East Consulting Partner, Economics & Sustainability said: ‘Across the region, we see national visions drive transformation at an unprecedented pace and scale in ways that are aligned with ESG principles. We believe that ESG can take this transformation to the next level, with increased adoption leading to competitive advantage and long-term sustainable development.’ He added ‘The opportunities are there, and the potential is huge, particularly when considering the region’s historic role in the energy sector globally and the huge reservoir of young talent.’
Dr. Yahya Anouti, Partner at Strategy& Middle East and the ESG Leader expanded: ‘There is a synergistic relationship between ESG and the transformation we are seeing in the region. Integrating ESG principles into a holistic strategy that is embedded across an entity, will ensure that the transformation journey yields trust and delivers sustained outcomes. That is why we launched a survey that aims to understand where the region is on its journey to become a global player in the ESG space, and to advise on the steps needed to move forward.’
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