ESG Reporting in UAE: From Compliance to Strategic Value

Climate ambition intersects with economic diversification in the United Arab Emirates. Eventually, ESG reporting has now emerged as a key component of competitive positioning and institutional credibility in the nation. Boards are increasingly preoccupied with navigating its practical and strategic implications instead of challenging its relevance. With a growing focus on what makes for meaningful, high-quality disclosure, the discussion has shifted from intent to implementation.  What started out as a voluntary reporting effort is now becoming essential to stakeholder alignment, risk management, and capital access.  Companies that establish organized, reliable ESG reporting systems now will be better equipped to take the lead tomorrow as the transition from optional to required disclosure is under way.  

Green Way helps organizations to move beyond fragmented efforts. We tend to build credible, compliant, and strategic ESG reporting systems. Our methodologies combine international standards with localized context to ensure  disclosures appeal to both global stakeholders and local regulators.

Why ESG Reporting UAE Matters, Now More Than Ever? 

The structured disclosure of non-financial information comes across three important pillars: 

• Environmental: ESG team evaluates carbon emissions, climate risk, and wastages
• Social: They check community impact, DEI, labor norms, and safety issues
• Governance: Here the considerable factors are ethics, board oversight, risks and data security 

An organization’s risk management, resilience, and long-term value creation across financial, environmental, and social aspects can all be clearly seen when ESG reporting is done well. Numerous studies from the World Economic Forum, McKinsey, and BlackRock show that promising ESG performance is associated with the following aspects: 

• Higher reputational durability 
• Lower capital costs
• Robust risk-adjusted returns

Today, ESG reporting is a critical input for investors, lenders, regulators, and business partners alike.

Business cases with ESG disclosures in the UAE are worthwhile. These disclosures are something more than regulatory alignment. They strategically facilitate long-term resilience and financial accessibility.

The UAE ESG reporting frameworks

The regulatory landscape of the nation is becoming increasingly structured with multiple decrees and resolutions. It encompasses  tracking emissions, disclosures, and climate governance. Notably, reporting requirements and enforcement measures are becoming more complex. They present both compliance risks and strategic opportunities for early movers.

ESG reporting UAE is actively integrating sustainability into its regulatory frameworks. Despite the ongoing evolution of the ecosystem, a number of significant events are already influencing disclosure expectations:

1. The UAE Climate Law

This Federal Decree-Law No. 11 of 2024 provides the legal basis for climate regulation at the national level. It is applicable to all public and private sector entities under the jurisdiction of federal and municipal laws as well and as this evolves, it is expected to apply to free zones as well. Scopes 1 and 2 reporting is required, and while Scope 3 is not yet mandatory, it is expected to gain relevance in future guidance. According to the pledge to achieve Net Zero by 2050, entities must implement and publish climate mitigation initiatives. The implementation begins in May 2025 with non-compliance penalties ranging from AED 50,000 to 2 million.

2. DFM ESG Disclosure Guidelines

Introduced in 2020 and revised in 2023, the voluntary guidelines of the Dubai Financial Market urge listed entities to report performance. ESG Reporting in Dubai, specifically with standardized templates as per GRI, SASB and TCFD frameworks Adoption is still optional for now, but expected by both regulators and investors.

3. ADGM Sustainable Finance Framework

This regulation encourages ESG integration in capital markets in accordance with the 2019 Abu Dhabi Sustainable Finance Declaration. The voluntary reporting must align with global standards. The goal is to enhance credibility with institutional investors.

4. Implications of CSRD and ESRS

UAE companies that generate more than €150 million in revenue within the EU and operate a branch (with at least €40 million in revenue) or a subsidiary may be subject to the Corporate Sustainability Reporting Directives. They may require partial or full compatibility with the ESRS policies by the financial year of 2028. This changing environment clearly marks a move away from aspirational rhetoric towards legally binding obligations.

Businesses that take CSRD and ESRS initiative will be better equipped to lead and adapt. At the same time, the Cabinet approved a decision No. 67 of 2024, which established a National Carbon Registry. Meanwhile, entities with an annual release of over 0.5 million tonnes of CO₂ equivalent are now required registration and verification of emissions, adding further rigour to the UAE decarbonisation pathway.

International Standards: A Fragmented But Convergent Landscape 

The following are some of the most popular UAE ESG reporting frameworks, however they are not exhaustive.  Companies may also use alternative techniques such as the Integrated Reporting Framework, UNGC Communication on Progress, or GRESB. It exclusively depends on their sector or investor needs.  While ESG reporting is still difficult, and no single standard applies globally, the environment is gradually converging around a few widely used frameworks. Each has a different function and target audience.

1. Global Reporting Initiative

The most extensively used international reporting standard for ESG performance is GRI. It helps companies to disclose their social and environmental effects in a stakeholder-focused way. Because the framework is topic-specific and modular, it can be used by organizations in any field. For businesses looking to show wide sustainability impact and stakeholder accountability, GRI is specifically pertinent.  It is a perfect fit for both public sector organizations and multinational corporations because of its transparency and conformity to international standards.

2. Sustainability Accounting Standards Board

SASB provides a suite of industry-specific standards focused on ESG issues with financial materiality. Suited more for investors, with SASB companies can report on how sustainability info affects financial performance and corporate value. APRA covers 77 sectors making sure that the disclosures are relevant and comparable to its sector. SASB standards, which are currently overseen by the ISSB, are increasingly being used to reconcile GRI and GRI investor-focused reports.

3. Task Force on Climate-related Financial Disclosures

Businesses can use the voluntary TCFD-based frameworks to evaluate the financial risks and opportunities related to climate change. It focuses on four key areas:

• Governance
• Strategy
• Risk management
• Metrics and target

Companies using TCFD may demonstrate climate resilience, match with rising regulatory expectations, and guide strategic investment decisions. Its principles are already reflected in several regional disclosure guidelines.

4. Carbon Disclosure Project

A global disclosure system that addresses deforestation, water security, and climate change is provided by CDP.  Businesses can discover environmental risks and opportunities while communicating transparency to investors by completing comprehensive questionnaires that are graded and benchmarked.  Organizations can align with global sustainability standards and show that they are prepared for transitions by using CDP reporting.

5. The International Sustainability Standards Board

ISSB is consolidating SASB and TCFD into a global baseline under the IFRS Sustainability Disclosure Standards. Meanwhile, the EU’s CSRD, via the ESRS, introduces double materiality reporting, capturing both financial and impact dimensions. These frameworks will shape global expectations for comparability, assurance, and regulatory alignment.

Voluntary vs. Mandatory: Why Proactive Disclosure Still Matters

For many UAE-based companies, ESG reporting is still voluntary, but that is changing. A growing number of entities, particularly those operating in regulated sectors, listed markets, or with international exposure, are subject to mandatory or strongly encouraged disclosure requirements. As regulation tightens, ESG disclosure is fast becoming the norm. But still, the benefits of proactive ESG reporting are more than just compliance and include the following:

Cost savings: It helps save funds through energy efficiency, waste reduction, and supply chain optimisation.

Capital access: ESG-related financing is on the rise throughout the GCC. 

Goodwill: Investors, regulators, lenders and customers all find it trustworthy.

Talent acquisition and retention: It is particularly important for younger professionals who seek purpose-driven seniors.

Reporting offers improved risk visibility and preparedness. It is not just about transparency, it’s a tool for internal alignment, strategic clarity, and stakeholder engagement.

Selecting the Right ESG Reporting Framework

There is no single “correct” framework. The choice depends on:

• Your sector and exposure to ESG risks and opportunities
• Investor and stakeholder expectations
• Geographic reach and regulatory exposure
• Internal systems and capacity
• Reporting objectives, from compliance to differentiation

Many UAE companies are adopting blended approaches, combining GRI’s breadth with SASB’s sector relevance and TCFD’s climate lens. As ISSB and CSRD become more prominent, dual alignment is becoming the norm for globally exposed organisations.

How Green Way Adds Value

At Green Way, we don’t just deliver reports, we build ESG reporting systems that support decision-making, resilience, and stakeholder trust. Our UAE-based advisory team offers:

• Materiality and stakeholder mapping aligned with local and global expectations
• Gap analysis against UAE ESG reporting frameworks
• Scenario modelling for climate-related risk and opportunity
• ESG data diagnostics, process improvement, and system integration
• Full-service report development, design, and assurance support
• Training and internal ESG capacity-building

We assist in transforming ESG reporting into strategic capital, whether you’re redefining your brand, overcoming a regulatory threshold, or getting ready to list. Let’s move beyond compliance. Partner with Green Way to develop an ESG reporting UAE strategy that builds credibility, resilience, and long-term value.