Environmental, social, and governance (ESG) principles are becoming the cornerstone of economic strategy, with the United Arab Emirates and the broader Gulf region rapidly emerging as global leaders in sustainability.
According to a new global analysis from PROI Worldwide called The Global ESG analysis 2025, Gulf economies, long viewed as hydrocarbon powerhouses, are increasingly redefining sustainability as a stimulus for diversification, competitiveness, and long-term success.
This change is most evident in the UAE, where extensive climate legislation has made ESG a strict legal necessity. Every organization in the nation, regardless of sector or free zone, is required by Federal Decree-Law No. 11 of 2024, which went into effect in May 2025, to measure, report, and cut greenhouse gas emissions by May 30, 2026. Failure to do so will result in fines ranging from Dh50,000 to Dh2 million.
The UAE is become the first country in the world to make ESG compliance legally enforced, marking a significant departure from voluntary sustainability obligations. Companies must submit decarbonization plans aligned with the national Net Zero 2050 policy, create annual emissions inventories, and retain GHG data for five years.
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