The Middle East is gearing up to combat climate change — its private sector can lead the way

No region will evade the consequences of a warming planet, but the Middle East and North Africa (MENA) is among the most vulnerable to its effects.

MENA is warming at twice the global average and is projected to be up to 4°C warmer by 2050. Some research indicates that this threat — compounded by food security, droughts and pollution — risks human inhabitability in many cities by the end of the century.

To mitigate this, some countries have begun integrating climate commitments into their strategic planning. The United Arab Emirates and Oman have announced a goal of net-zero by 2050, and the Saudi Green Initiative aims for net-zero by 2060. To support these goals, they have launched ambitious programmes to scale decarbonization pathways, like renewables and nuclear, and to develop emerging low-carbon technologies like green hydrogen and carbon-capture and utilization systems.

But strong policies must be accompanied by committed and strategic action from non-governmental stakeholders.

To meet their Nationally Determined Contributions (NDCs), countries need the private sector. Companies in MENA currently lag behind the rest of the world in corporate ambition related to national sustainability efforts.

Businesses in MENA can play a key role in protecting their country’s economy, environment and population from the impacts of climate change. By accelerating commitment, execution capability and resource availability, they can incentivize climate adaptation initiatives.

Bain & Company evaluated over 200 publicly listed and private companies for their disclosures and sustainability measures across MENA’s nine major economies. These companies constitute nearly 80% of the market cap of their countries’ stock exchanges and include the largest privately owned companies from hard-to-abate sectors, such as energy, chemicals, steel, aluminium, aviation, cement and utilities.

Encouraging signs of progress are reflected in the actions of some of the largest companies in the region. Companies like Majid Al Futtaim, ADNOC and Etihad Airways (UAE), Agility (Kuwait) and Saudi Aramco, ACWA Power and SABIC (Saudi Arabia) have all implemented actions designed to reduce emissions, increase renewables or scale nascent low carbon technologies such as green hydrogen and sustainable aviation fuel.

However, of the overall sample analyzed, only half have started ESG reporting, with 40% disclosing their Scope 1 and Scope 2 emissions. Approximately 12% have announced net-zero ambitions and only 6% have defined their roadmap. Therefore, there is vast room for improvement. In the region, there is a lack of transparent and globally consistent emissions disclosure policies, credible reduction roadmaps, or science-based target setting.

In MENA, there is little evidence of transparent and globally consistent emissions disclosures policies, credible reduction roadmaps or science-based target setting for the short-to-medium term.

Of the companies analyzed, only:

This deficit is significant in comparison to other regions. India, for example, is similar in economic size to the MENA region — around $3-3.5T GDP, but there:

While government is the foundation of a country’s climate ambitions, the private sector is its engine of innovation. But generalized altruism is not a sufficient enough motivation for action. The pathway to strategic success requires an awareness of and focus on:

Business leaders can take actions today to aid MENA’s fight against climate change and insulate the region against the risks it poses.

Climate change can only be solved by the mobilization of all segments of society. That is why the World Economic Forum has brought together a coalition of progressive leaders from MENA including policymakers, business leaders, banks and industry experts to constitute Leaders for a Sustainable Middle East and North Africa (LSM), a region-specific coalition to accelerate corporate climate action and helping to shape COP27 and COP28 as major global milestones for public-private collaboration.

In the run-up to COP28, the LSM aims to create a platform for dialogue between the policymakers, businesses and financiers to exchange best practices, identify opportunities for collaboration and mobilize the ecosystem towards a just net-zero transition for the Middle East and North Africa.