UAE entrepreneurial spirit must have sustainability at its heart
We live in an area of the world where we have harnessed the geography, landscape and weather conditions to enjoy the best possible lifestyle. The harsh landscapes – and living conditions - endured by our recent ancestors have now been transformed into a world-class urban environment and a lifestyle level that is the envy of the world.
But at what cost? As desert dwellers, we perhaps understand more than most the need to use water – and other forms of finite energy – wisely.
The UAE is challenged by three main environmental issues: loss of wildlife habitat through urbanisation and industrialisation, limited agricultural land caused by UAE's arid landscape and low precipitation, and the intensifying effects of climate change such as sea level rising and the increasing frequency of dust storms. There’s also a need to monitor the impact of rapid development and the effects of climate change and global warming.
Our growing population contributes to ever worsening dependency on desalination water plants and increasing huge food imports from its main supplier, India.
These desalination plants run on fossil fuels.
One newspaper in the region recently published an article indicating that while this region contributes only around 5 percent of CO2 emissions globally, the impact of climate change is severe in comparison.
According to a 2010 ‘Living Planet’ report from the World Wildlife Fund (WWF), the biggest ecological footprint in the world was generated right here in the UAE. This is a measure of a country's sustainability that compares the use of natural resources per person per capita.
Basically, it enables us to compare the effects of our current consumption upon available resources.
But times are definitely changing, and there’s now far greater individual and corporate awareness of ESG – that’s Environment, Social and Governance - goals.
There is a strong local and regional ESG agenda forming, driven by numerous government initiatives, efforts to diversify away from oil and gas, and increasing requirements for disclosure on sustainable activities and reporting.
Recent sustainable financing firsts in the region signal the success of – and opportunities available to – companies committed to integrating ESG goals into their corporate and investment strategies.
Of course, encouragement comes from the top, and the UAE is a signatory to the Paris Agreement and the UN Sustainable Development Goals, overseen by the UAE’s very own Minister for Climate Change and Environment, His Excellency Dr Abdullah Belhaif Al Nuaimi.
There has also been a push for UAE-based companies to disclose their ESG performance.
The KPMG UAE Survey of Sustainability Reporting 2020, released in December 2020, said corporate sustainability reporting among the top 100 UAE companies increased from 44 percent in 2017 to 51 percent in 2020, with multiple industries, including construction and materials, financial services and oil and gas, showing an uptick in reporting rates.
In its annual 2021 Middle East CEO survey, PwC revealed that only 11 percent of those business executives questioned said they planned to “significantly” increase Sustainability and ESG initiatives. Some 35 percent said they’d like to increase these initiatives moderately.
With these figures as a backdrop – revealing almost half of the respondents were planning more sustainability-based activity – it seems the future of sustainable accountability, especially in business, is positive.
The UAE government has always had sustainability at its heart. It has a body of legislation to ensure we live in a safe, protected, sustainable environment. Also, renaming the Ministry of Environment and Water to the Ministry of Climate Change and Environment officially brings management of climate change within its scope.
Recently, there have been a raft of initiatives, driven in part by increasing awareness and the government strategies, including UAE Vision 2021, the UAE Centennial 2071, and the UAE Energy Strategy 2050, setting out a 50 percent target for clean energy in the country.
Admitting we have some way to go to truly become sustainable is the first step. Encouraging more awareness and activity is next, but how can that be achieved?
I believe a three-pronged approach is best, comprising: education, a comprehensive legal framework and funding and development finance to build a green future.
We need to move from mitigation strategies into an era of adaptation. Rather than trying to fix issues, we need to create new solutions.
This links back perfectly into the entrepreneur culture prevalent in the region. Future entrepreneurs must have sustainability at the heart of their business.