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Jeddah - Yasmine El Tohamy - MENA firms urged to embrace sustainability transformation in climate action report
RIYADH: Businesses in the Middle East and North Africa region need to recognize that the sustainability transition can unlock unique opportunities while reducing headwind risks, a global report has urged.
The study, conducted in collaboration between Bain & Co. and the World Economic Forum, has revealed that companies in the region are trailing behind their global counterparts in adopting sustainability practices.
Additionally, it added that consumers tend to underestimate the unique environmental vulnerabilities specific to the MENA region.
As it examined the challenges posed by climate change to the nature, economies, and businesses in the region, the report put forward several recommendations.
These included advocating for the adoption of science-based targets, promoting the decarbonization of operations, emphasizing the need for resilient planning, and encouraging the mobilization of sustainable financial resources.
Policymakers are urged to take action by establishing clear climate regulations, facilitating access to technology and infrastructure, expanding the availability of sustainable financing solutions, and promoting educational access to nurture talent.
According to the report, these strategic actions have the potential to enhance economic diversification, increase exports, and create employment opportunities throughout the MENA region.
Akram Alami, partner and Middle East head of aviation, utilities, and sustainability and responsibility practices at Bain & Co., highlighted the necessity for more ambition in climate commitments, particularly among major emitters and corporations that are falling behind their global peers.
He stressed the urgency of raising consumer awareness and called for collective action to secure an equitable and prosperous future for the region and the planet.
The report underscored the importance of bold initiatives in shaping a sustainable future, emphasizing the crucial roles of policymakers, businesses, and collaborative platforms.
Maroun Kairouz, head of the MENA at the World Economic Forum, highlighted pivotal components, which include clear regulations, access to financing, technology, and training. He also emphasized the importance of the adoption of science-based targets, extending influence along value chains, and fostering public-private partnerships.
Raja Atoui, a partner at Bain & Co. Middle East, drew attention to the necessity for targeted measures in key emitting sectors, including utilities, heavy industry, oil and gas, and transportation.
These measures encompassed efficiency improvements, the utilization of renewable energy, and the adoption of cutting-edge technologies such as CCUS and clean hydrogen.
The MENA region is projected to experience warming at twice the global rate, underscoring the critical role businesses play in mitigating the effects of global warming.
The report highlighted that quick, actionable measures include transitioning to more climate-friendly practices and adopting global best practices. Moreover, setting clear objectives, raising consumer awareness, and collaborating with governments are vital components in this pursuit.
Saudi Arabia has taken significant steps in this direction by committing to achieve net zero carbon emissions by 2060 and to securing 50 percent of its electricity from renewable sources by 2030.
During MENA Climate Week 2023 in Riyadh, the Kingdom’s Clean Development Mechanism Designated National Authority introduced a model that enables companies to acquire credits for offsetting greenhouse emissions.
Under the system, businesses receive a specific number of carbon credits, which represent the allowable level of emissions they can produce. If a business surpasses its allocated credits, it must acquire additional credits from other businesses that have emitted less than their assigned credits.
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