For businesses to remain competitive, ESG strategies must be a priority
For businesses to remain competitive, ESG strategies must be a priority

Regional businesses need to create robust ESG strategies as all eyes turn to UAE for Cop28



With COP28 being hosted in the UAE in November 2023, the progress the nation has made in its bid to become net-zero by 2050 will undoubtedly become a focal point. Government, businesses and individuals all have a role to play in achieving this goal.

Environmental, Social and Governance (ESG) strategies have played an important role in reducing the impact businesses have on the environment and reducing their GHG emissions - the underlying aim of COP. While ESG is designed to identify business risks more generally, one of the main risks businesses face in securing their long-term future is climate change.

Reporting underpins the efficacy of a company’s ESG strategy and is now a high-stakes business imperative. Analysing ESG performance not only enables businesses to track their progress but is being used more and more frequently by other stakeholders to support their own decision making.

Despite this, the world of ESG reporting remains fragmented, complex and confusing. It does not yet have clear frameworks and governance requirements like financial reporting, which makes it challenging to accurately assess an organisation’s environmental impact.

Chartered accountants have a crucial role to play in steering an organisation’s ESG journey. Auditors will be key in ensuring the information in the report is consistent with the numbers, safeguarding transparency and credibility. Assurers will also need to support businesses in providing confidence in their ESG disclosures.

ICAEW (the Institute of Chartered Accountants in England and Wales) spoke with the four largest professional service networks in the world, Deloitte, EY, KPMG and PwC, to further understand the impact of ESG strategies on reaching net-zero goals.

How will ESG pave the road to net-zero?

ESG is a good starting point for businesses, but an authentic net-zero approach means a sustainability mindset – not just an ESG mindset. While net-zero addresses some of the issues, it isn’t the same as managing financial risks. The cost needed to drive businesses to a net-zero solution may well be too disruptive for some sectors.

Despite this challenge, we expect ESG strategies to affect behaviour changes across wider society, contributing to reaching net-zero goals.

For Yasir Ahmad, EY MENA Climate Change & Sustainability Services Leader, “ESG strategy provides the framework to move net-zero from commitment to action, and the aspirational maturity curve of ESG leads it towards the net-zero route.”

“The measurement and reporting processes of ESG - particularly when it comes to measuring an organisation’s climate impact - will not only drive the road to net-zero, but will deliver holistic positive social, environmental and economic improvements,” says Azzah Fawzi, Partner, Risk Assurance, Energy, Utilities and Resources and ESG Reporting Leader, at PwC Middle East.

Damian Regan, Middle East Sustainability Reporting & Assurance Leader at Deloitte, shares that the benefits of ESG strategies will ultimately extend beyond businesses. “The growing awareness of ESG is helping to build support toward net-zero goals, change behaviours, influence consumers, drive demand for and increase investment in climate related technology,” he explained.

Fadi Al Shihabi, Partner – ESG Services Leader at KPMG added: “ESG is paving the way towards net-zero by embedding sustainable behaviours and systems with clear positive impact into businesses and society.”

Why ESG strategies must be top-to-bottom?

Getting ESG and sustainability right is all about getting governance right. This requires leadership, which must be imbued in every aspect of the business.

According to EY, boards have critical roles to play in unlocking ESG’s strategic value. “Boards and CEOs have a critical role to play in establishing robust governance to seize the growth opportunities of the ESG agenda, build ESG risk resilience, and meet stakeholders’ expectations.”, says Yasir Ahmad at EY.

KPMG also points out that the governance structure of ESG is vital for successful implementation. “The governance of a business is responsible for developing and approving all internal systems of practices that make up the foundation of decision-making and investments; therefore, it’s important that ESG strategies are driven from the top,” explains KPMG’s Fadi Al Shihabi.

Damian Regan at Deloitte emphasizes that those in senior positions will set the ESG agenda. “ESG Strategy needs a ‘tone from the top’ to demonstrate leadership and commitment to change. Ultimately, the credibility of a company’s claim of adherence to ESG principles and its appetite to embrace ESG as an organisation is set by those in leadership positions.”

However, Azzah Fawzi, Partner at PwC Middle East, argues that sustainability also needs to penetrate the whole organisation. “Embedding sustainability into the DNA of an organisation and making it part of its strategic progression is critical to success,” she said.

How are the big four driving the ESG movement?

The role of the Big 4, as with any accountancy role, is to make sense of the ESG movement - providing business managers with critical information and interpreting that information with insight and wisdom.

EY has over 2,500 dedicated sustainability professionals across its network working closely with the 312,000 EY people to address clients’ sustainability challenges. By leveraging multidisciplinary skillset, tools and technologies, they provide strategic advice to clients throughout their sustainability journey, from developing and implementing ESG strategies that deliver real value, to communicating ESG performance through reliable and trusted reporting.

PwC and Strategy& have been driving the ESG movement through extensive research and thought leadership. This includes the development of ESG tools to help organisations navigate their ESG journeys and benchmark themselves against their competitors.

Deloitte’s commitment to ESG includes an investment of US$1 billion in client-related services, data-driven research, and assets and capabilities. Deloitte has also built on its efforts of empowering individuals as part of its WorldClimate strategy by offering a robust curriculum of sustainability training courses to 345,000 professionals along with its clients and suppliers. In addition, they continue to drive forward thinking thought leadership focused on sustainability working closely with private and public sector organisations across the Middle East and globally.

Meanwhile, KPMG has committed to working shoulder to shoulder with clients to support them on their own ESG journeys, across four important categories: Planet, People, Prosperity and Governance. Therefore, KPMG has launched to a multi-year investment programme which will ensure that ESG is embedded into everyday activities and operations. This programme actively educates and spreads awareness through several platforms, such as ‘ESG Voices’ which are concise podcasts, ‘ESG Insights’ aimed towards businesses, and ‘ESG Stories’ which demonstrate how KPMG has guided clients to uncover solutions for their specific and unique challenges.

Why does ESG make business sense?

Put simply, it has been said that there is no prosperity on a dead planet - and businesses do not succeed in societies that fail. This is now widely accepted by global and regional businesses.

But what has also changed is the perception of ESG systems which were previously regarded as inhibitors of financial growth. “The benefits and success of ESG integration into business strategies has been observed across the globe and is documented time and time again. It is now common for investors, stakeholders, and consumers to make their decisions from an ESG perspective,” said Fadi Al Shihabi.

Yasir Ahmad at EY further explains, “Strong ESG performance creates value for organisations by attracting investors, unlocking access to capital markets and helping tap into new markets or customer segments.”

Looking at the financial perspective, Damian Regan at Deloitte says ESG strategies also impact the future valuation of companies given stakeholder and investor focus in driving a longer term impact. “The importance of ESG to businesses is recognised by investors who are asking for more accurate and comparable non-financial information on which to make their investment decisions. This contributes to their analysis of future values of companies,” he explained.

PwC and Strategy& highlights how ESG can have an impact on employee turnover. Azzah Fawzi, Partner, at PwC Middle East, says, “We know that impact-driven organisations tend to have lower employee turnover and, from an investment perspective, companies who focus on higher ESG-rated investment opportunities will enjoy a greater return on those investments in the long term.”

For businesses to remain competitive, ESG strategies must be a priority. The impact on wider society, lifestyle behaviours and consumer influence will be a key driver to reaching net-zero, particularly as the region looks towards hosting COP28. However, it is important to remember that ESG is the ‘business lens’ of sustainability. To reach net-zero targets, an authentic sustainability response to business decisions is needed.

$1,000 award for 1,000 days on madrasa portal

Daily cash awards of $1,000 dollars will sweeten the Madrasa e-learning project by tempting more pupils to an education portal to deepen their understanding of math and sciences.

School children are required to watch an educational video each day and answer a question related to it. They then enter into a raffle draw for the $1,000 prize.

“We are targeting everyone who wants to learn. This will be $1,000 for 1,000 days so there will be a winner every day for 1,000 days,” said Sara Al Nuaimi, project manager of the Madrasa e-learning platform that was launched on Tuesday by the Vice President and Ruler of Dubai, to reach Arab pupils from kindergarten to grade 12 with educational videos.  

“The objective of the Madrasa is to become the number one reference for all Arab students in the world. The 5,000 videos we have online is just the beginning, we have big ambitions. Today in the Arab world there are 50 million students. We want to reach everyone who is willing to learn.”

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Northern Warriors v Team Abu Dhabi, 3.30pm
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Qalandars v Maratha Arabians, 8pm

Citadel: Honey Bunny first episode

Directors: Raj & DK

Stars: Varun Dhawan, Samantha Ruth Prabhu, Kashvi Majmundar, Kay Kay Menon

Rating: 4/5

COMPANY PROFILE
Name: HyperSpace
 
Started: 2020
 
Founders: Alexander Heller, Rama Allen and Desi Gonzalez
 
Based: Dubai, UAE
 
Sector: Entertainment 
 
Number of staff: 210 
 
Investment raised: $75 million from investors including Galaxy Interactive, Riyadh Season, Sega Ventures and Apis Venture Partners
Company%20Profile
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%20Ramez%20Gab%20Min%20El%20Akher
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The BIO:

He became the first Emirati to climb Mount Everest in 2011, from the south section in Nepal

He ascended Mount Everest the next year from the more treacherous north Tibetan side

By 2015, he had completed the Explorers Grand Slam

Last year, he conquered K2, the world’s second-highest mountain located on the Pakistan-Chinese border

He carries dried camel meat, dried dates and a wheat mixture for the final summit push

His new goal is to climb 14 peaks that are more than 8,000 metres above sea level

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UAE currency: the story behind the money in your pockets

Electoral College Victory

Trump has so far secured 295 Electoral College votes, according to the Associated Press, exceeding the 270 needed to win. Only Nevada and Arizona remain to be called, and both swing states are leaning Republican. Trump swept all five remaining swing states, North Carolina, Georgia, Pennsylvania, Michigan and Wisconsin, sealing his path to victory and giving him a strong mandate. 

 

Popular Vote Tally

The count is ongoing, but Trump currently leads with nearly 51 per cent of the popular vote to Harris’s 47.6 per cent. Trump has over 72.2 million votes, while Harris trails with approximately 67.4 million.

If you go
Where to stay: Courtyard by Marriott Titusville Kennedy Space Centre has unparalleled views of the Indian River. Alligators can be spotted from hotel room balconies, as can several rocket launch sites. The hotel also boasts cool space-themed decor.

When to go: Florida is best experienced during the winter months, from November to May, before the humidity kicks in.

How to get there: Emirates currently flies from Dubai to Orlando five times a week.
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Tree of Hell

Starring: Raed Zeno, Hadi Awada, Dr Mohammad Abdalla

Director: Raed Zeno

Rating: 4/5

Updated: November 30, 2022, 3:26 AM