About two years ago, many companies positioned themselves as champions of sustainability in the Middle East, especially the transition to clean energy, recycling programs, carbon offsetting, and supply chain sustainability.

They said climate change had “driven us to confront it more forcefully” and invest in removing as much carbon dioxide from the environment as they committed to by 2050 at the latest. Companies made a dozen announcements every day stating: “Climate action is important,” “We include targets based on climate science,” and “In our stewardship, efforts around sustainability are gaining ground.”

Setting such a goal, in a way, forced all sorts, even small startups, to step up their efforts and make similar commitments.

It’s one thing for a company to make a commitment to sustainability. To actually make continuous positive impacts, especially taming significant environmental footprints and high operational costs—is another thing altogether. 

DECLINE IN FERVOR AND NOISE

So, cut to the present: Half a year into 2024, we aren’t hearing from many companies that trumpeted their environmental activism about matching words with deeds. 

“The perception is that momentum and enthusiasm towards sustainability and climate action waned after COP28 for businesses in the Middle East,” says Mohammed Mahmoud, water management and climate adaptation expert. “Initially, there was significant pressure to deliver commitments and goals at COP28. However, with the focus shifting towards COP29 in Baku, attention to the sustainability efforts of these businesses has diminished.”

Given the greater global attention on climate issues, all agree that COP28 did put some pressure on organizations to increase their involvement in sustainability and adopt initiatives.

“High-profile events like COP28 often catalyze businesses to enhance their sustainability efforts to meet regulatory expectations and align with international standards. However, the post-conference period may see a decline in fervor as the immediate pressure diminishes,” says 

Dr. Walid Saleh, water resources management specialist and head of the Water and Natural Resources Programme at FAO, Yemen.

In fact, many times, Sultan Al Jaber, COP28 President, UAE’s Special Envoy for Climate Change, and the Minister of Industry & Advanced Tech, reiterated the broader efforts to fight climate change hinge as much on embracing the private sector and shifting market conditions as it does on negotiations. “The political process needs to be well complemented with private capital and a business mindset,” he said.

However, many still need to provide emissions reduction targets despite saying they want to reduce their impact on climate change. Others have made commitments but have struggled to cut emissions. Also, interestingly, many more are realizing that the technology doesn’t yet exist to carry out their “moonshot” objectives. 

Many set aggressive targets, and they are struggling with them, say experts.

“Like businesses everywhere, those in the Middle East have not abandoned sustainable initiatives but have re-evaluated overall costs that proved substantial. Despite the best intentions, private businesses are conscious of the bottom line, and if profit margins are low, which is the case in many instances, costly pledges are deferred,” says Joseph Kéchichian, a political scientist and a senior fellow at King Faisal Center for Research and Islamic Studies, Riyadh.

Mahmoud adds, “Reality may have set in concerning the substantial effort, high costs, and long timelines required to fulfill these promises.” 

Others acknowledge that companies are not backing their climate pledges with tangible action quickly enough, but things are trending in the right direction.

In recent years, Dr. Yahya Anouti, PwC Middle East Sustainability leader, says the adoption of sustainability by organizations in the Middle East has steadily increased in response to growing pressure from investors, governments, and consumers. 

“Change is underway in the region, but more can be done to accelerate the progress. Creating positive, enduring change requires timely actions, building the right capabilities, and developing infrastructure and legislation to provide the framework to further enable progress,” adds Anouti.

Committing to long-term sustainability targets can be challenging, says Professor Tadhg O’Donovan, Chief Scientist at Heriot-Watt University. “However, these commitments are crucial to embedding sustainability into organizational strategies, ensuring ongoing progress toward the fulfillment of net zero targets, contributing to a greener environment, and reducing overall dependency on ecologically damaging living methods.”

IT IS EVERYBODY’S PROBLEM

For all these ambitious targets, experts argue that the current voluntary approach will not ensure the required reduction in emissions. That leaves companies setting climate targets on their own terms. Experts say many announced that they would align with the Paris agreement without a clear plan for getting there. They are not meeting the criteria laid out by the UN, which calls on companies to track their carbon footprint across supply chains, immediately cut emissions, create a scientifically credible plan for using carbon offsets, and report annual progress on meeting climate targets.

“To reach ambitious sustainability targets, increased and sustained collaboration between businesses, academia, and government is essential. This multi-stakeholder approach will help drive the innovation and systemic changes needed to achieve global environmental goals,” adds O’Donovan.

Undoubtedly, governments are placing a big emphasis on sustainability. 

There is the impetus set by government-led national targets to tackle climate change, particularly in the GCC. The UAE and Oman have committed to net-zero emissions by 2050, and Bahrain, Kuwait, and Saudi Arabia by 2060, says Anouti. “The effects of these commitments are cascading down to governmental entities and organizations.”

However, determining how hard companies are trying can be very difficult when no regulatory standards require uniform disclosures of important information like emissions.

“Sustainability reporting by public companies in the Middle East remains largely voluntary, unlike the mandatory requirements in the EU and US,” says Anouti. “But we are seeing an increasing number of regional businesses are now publishing sustainability reports. In 2024, over 40% of our sustainability survey respondents said their companies produce full reports, while 24% disclose selected sustainability or ESG metrics.”

Saleh says the regulatory environment, consumer and investor demand for sustainable practices, and, most importantly, public and media scrutiny can keep businesses accountable and committed to their sustainability promises.

“There is a significant need for more transparency and sustainability reporting in businesses,” adds Saleh.

There’s a mixed landscape when it comes to sustainability efforts. There are examples of companies making significant strides in aligning their actions with their sustainability commitments and investing in innovative technologies, transparent reporting, and stakeholder engagement to drive real progress, says Anouti.

“However, he continues, “it is also fair to acknowledge that some companies are still on their journey towards fully integrating sustainable practices into their core operations. This gap between intention and action will be closed in time, as companies upskill and better align with their expectations.”

Focusing on government pledges at COP28 or its future iterations skirts the real challenges our world faces, adds Kéchichian. “Governments are monolithic entities that pass laws and, if privileged societies are lucky, follow up with strict enforcement—but that is seldom the case in 80% of the world. Our environmental welfare requires that we, individually, rise to the occasion.”

REDUCING EMISSIONS IS CHALLENGING

While it’s true that many do not have clear climate disclosures and credible environmental plans, for those who are serious about their commitment,  reducing emissions is challenging due to the associated costs. 

Businesses must accurately measure their carbon dioxide and other greenhouse gas emissions. Then, they must seek cleaner energy sources that won’t disrupt their operations. When cleaner alternatives are unavailable, technologies for reducing emissions or removing carbon from the atmosphere are nascent and could be very expensive.

In recent years, Gulf countries have made a few moves to live up to the hype of carbon management solutions. For example, last year, Abu Dhabi National Oil Company greenlighted a plan to capture and store 1.5 million tons of carbon dioxide each year in underground geological formations, bringing its carbon capture capacity to 2.3 million tons yearly. 

Removing carbon from the atmosphere is fine, but the task gets even more complex when companies reduce so-called Scope 3 emissions—pollution caused by suppliers and customers. 

No matter how genuine their commitments were, the dilemma was the balance required between what government officials wished to tackle and what the private sector was tasked with implementing, says Kéchichian. “In time, and inevitably, environmental concerns will become far more important than they are today, and, again, companies will introduce long-term and sustainable policies to meet specific targets.”  

“Hasty decisions, however, especially those reached at international forums, tend to be divorced from reality.”

STAKES ARE HIGH

The stakes are high for getting sustainability commitments right. Brands are under more pressure than ever to adopt sustainable initiatives and produce eco-friendly products. It is one of the few social issues people expect companies to act on. Inauthentic commitments can lead to accusations of greenwashing.

In the Middle East, with the accelerated need to be more environmentally conscious and create pathways towards sustainability, greenwashing is possible, says O’Donovan. “But they will be exceptions and not the majority.” 

“It is important to understand that consumers have a heightened demand for sustainable actions and solutions across sectors, making it crucial for businesses to review their strategies,” he adds.

Addressing environmental challenges is a long game. It involves an honest assessment of your progress in sustainability and what work still needs to be done.

“Large companies are only interested in the bottom line and must be supervised by government watch-dogs to ensure compliance with existing environmental laws. They are the easy part to solve in this equation. The more complicated parts involve billions of consumers who refuse to alter their habits,” says Kéchichian. 

“Still, Arab Gulf societies are aware of environmental challenges and are addressing them, though how these will translate into real policies remains unclear,” he adds.