Mena is warming at twice the global average

No region can escape the effects of a warming planet, but the Middle East and North Africa (MENA) is especially at risk.

According to the World Economic Forum MENA is heating up twice as fast as the global average and could be up to 4°C hotter by 2050. This rapid warming, combined with food shortages, droughts, and pollution, might make many cities uninhabitable by the end of the century.

To address this, some countries are including climate commitments in their strategic plans. The United Arab Emirates and Oman aim for net-zero emissions by 2050, and Saudi Arabia’s Green Initiative targets net-zero by 2060. They are launching ambitious programs to reduce carbon emissions, such as using more renewable and nuclear energy and developing new low-carbon technologies like green hydrogen and carbon capture systems.

However, strong policies need to be backed by dedicated and strategic actions from non-governmental stakeholders.

To meet their climate goals, countries need help from the private sector. However, companies in the Middle East and North Africa (MENA) are behind the rest of the world in supporting national sustainability efforts.

Businesses in MENA can help protect their country’s economy, environment, and people from climate change. By increasing their commitment and resources, they can encourage climate adaptation initiatives.

Current Actions by MENA’s Private Sector:
Researched by Bain & Company who studied over 200 public and private companies in MENA’s nine major economies. These companies made up almost 80% of the market value of their countries’ stock exchanges and include the largest privately owned companies in sectors like energy, chemicals, steel, aluminum, aviation, cement, and utilities.

Some of the largest companies in the region are making progress. For example, Majid Al Futtaim, ADNOC, and Etihad Airways in the UAE, Agility in Kuwait, and Saudi Aramco, ACWA Power, and SABIC in Saudi Arabia are taking steps to reduce emissions, increase the use of renewable energy, and develop new low-carbon technologies like green hydrogen and sustainable aviation fuel.

However, in the overall sample of companies analyzed, only half have started reporting on environmental, social, and governance (ESG) factors, and 40% are sharing their Scope 1 and Scope 2 emissions. About 12% have announced plans to reach net-zero emissions, and just 6% have defined their detailed plans to get there. This shows there is still a lot of room for improvement. The region needs better transparency and consistent global policies for emissions reporting, credible reduction plans, and science-based targets.

In the MENA region, there is a lack of clear and consistent policies for reporting emissions, credible plans to reduce emissions, and science-based targets for the short to medium term.

Out of the companies analyzed:

  • Only 7% report their emissions to the Carbon Disclosure Project (CDP).
  • Only 2% have targets assessed and approved by the Science-Based Targets initiative (SBTi), which sets global standards for emissions reporting and reduction.
  • About one-third have initiatives related to water or circular economy practices.

This is a significant gap compared to other regions. For example, in India, which has a similar economic size to MENA with a GDP of around $3-3.5 trillion:

  • Over 47% of the 70 largest companies have net-zero goals.
  • 46% comply with CDP.
  • 29% have SBTi-approved targets or are working on developing them.
 

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Accelerated Corporate Action in MENA Against Climate Change

While the government sets the climate goals, the private sector drives innovation. However, general goodwill is not enough to motivate action. To succeed strategically, companies need to focus on:

  1. Strong Investment Rationale: Investing in low-carbon technologies and infrastructures is beneficial in the long run. Investors in MENA are increasingly considering companies’ ESG performance and net-zero plans before investing. Companies with better ESG practices have reported higher employee satisfaction and attractiveness as workplaces.
  2. NDCs and Net-Zero Targets: Policymakers set national targets to reduce emissions based on the Paris Agreement. These targets provide a framework for businesses to make informed investment decisions. The MENA region’s move to net-zero depends on businesses accelerating their efforts in technological innovation and business model changes over the next decade. Gradual and consistent changes are essential in this effort.
  3. Extreme Weather Events: Due to the high risk of climate-related issues in the region, businesses must adopt practical approaches to climate adaptation to protect the environment and local communities.
  4. COP Spotlight: After UAE hosted COP28, the region’s businesses are expected to show greater commitment to climate action. All stakeholders, including governments and regulators, are expected to step up their efforts.
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    Business Leaders Can Act Now on Climate Change

    Business leaders can take steps today to help MENA fight climate change and protect the region from its risks.

    1. Embrace Transition: Change starts at the top. Leaders can promote sustainability by creating a sustainability department and involving top management in all climate-related efforts.
    2. Adopt Global Practices: Implement practices that consistently measure and disclose the organization’s emissions (Scopes 1, 2, and 3), with transparent accounting and reporting.
    3. Establish Clear Objectives: Set clear climate change targets with a detailed roadmap and short-to-medium term goals. Aim for net-zero emissions and coordinate with the Science-Based Targets initiative (SBTi) for accurate assessment and tracking.
    4. Leverage Procurement Advantage: Encourage suppliers to be transparent and committed to sustainability goals. Include ESG criteria in procurement to boost suppliers’ emissions measurement, disclosure, and reduction plans.
    5. Raise Consumer Awareness: Launch targeted campaigns to increase awareness and encourage the adoption of sustainable practices among consumers.
    6. Partner with the Government: Collaborate with policymakers and regulators to define standards, methodologies, and targets for the economy’s transition. As regulations and expectations grow, working together will maximize the impact.

    The Future is Bright if We Act Now

    Solving climate change requires everyone’s participation. That’s why the World Economic Forum formed a group called Leaders for a Sustainable Middle East and North Africa (LSM). This group includes policymakers, business leaders, banks, and industry experts from MENA.
    LSM aims to create a platform for these leaders to talk, share best practices, find collaboration opportunities, and work together for a fair transition to net-zero emissions in the region.



Source:
https://www.weforum.org/
https://www.bain.com/