Investments in sustainability are not a tradeoff for businesses, but in fact, a trade-on according to Ahmed Galal Ismail, Chief Executive Officer, Majid Al Futtaim Holding, who was speaking today at the World Economic Forum's (WEF) Annual Meeting of the Global Future Councils 2023.
During a press conference titled ‘Leapfrogging MENA's Sustainability Journey’, Ismail emphasiDed: “You do not have to trade off your ability to finance a company for the long term to stay competitive. Investments in sustainability allow you to stay more competitive and more relevant in the long term.”
Ismail's remarks were in response to recent findings from a newly published report from WEF titled ‘Closing the Climate Action Gap: Accelerating Decarbonization and the Energy Transition in MENA’, in which Gim Huay Neo, Managing Director, Centre for Nature and Climate, World Economic Forum Geneva, highlighted that “only 12% of the region's largest 200 companies have set net zero targets, and only 6% have a roadmap to achieve these targets”.
“The Middle East and North Africa region is warming at twice the rate of the global average temperature. This will severely impact jobs, livelihoods, security, and human health for the 500 million people in this part of the region,” she stressed.
Ismail said the private sector require support from governments to decarbonize, stressing the need for "green frameworks to offer the right incentives for the private sector to maintain its commitment to sustainable investments”.
He stressed the importance of green regulations, taxes, financial tools for smaller companies with limited access to green financing, and increasing investments in green technology and talent, especially among the youth.
Tom De Waele, Managing Partner for the Middle East at Bain & Company, delved into the intricate challenge of policy in the context of sustainability. He noted: “The policy aspect poses an extremely interesting challenge because, while we have 60 percent of MENA emissions from national ambitions that have been declared under a net zero ambition, at the same time, if you look at the 2050 horizon, the world will need 40 percent more energy to sustain its growth.”
De Waele observed that in the UAE "there's a very decisive and focused leadership that can make decisions quickly, and that will be a very important enabler”.
He also highlighted the early-stage nature of many technology-based solutions, emphasizing the essential role of policymakers in providing financing, incentives, and offtake agreements to instill confidence in those spearheading the development of green technologies.
Henadi Al Saleh, Chair of the Board of Directors at Agility, stated: "Governments are incentivizing businesses and consumers alike to engage in greener products. What we find is that capital is being deployed in this direction, whether it comes from equity investors or investors across the GCC countries who are making sustainability a core part of their targets. Businesses are also following suit to contribute, and we even see consumers in the region willing to pay a slight premium, more than in the US, for green products."