- The most important value-based drivers include a commitment to ethical
business practices, social responsibility, and demonstrating leadership in ESG. - Mohammad Ali Rashed Lootah:
o “The success achieved recently by Dubai and the UAE in hosting the COP28
summit reflects the continuing drive to adhere to sustainable and responsible
development.”
o “We are keen to accelerate the adoption of ESG frameworks by the private
sector and ensure that these are implemented in line with international best
practices to deepen the contribution of organisations to society.” - Boosting efficiency is the top economic driver for multinational companies to
adopt responsible business practices, while family businesses identify efficiency
and operational benefits as their main economic drivers. - The report highlights a need for organisations to enhance their ESG data
capabilities by investing in technological solutions, training programmes, and data
governance frameworks.
Dubai, UAE – Dubai Chamber of Commerce, one of the three chambers operating
under the umbrella of Dubai Chambers, has successfully conducted a survey to
determine the level of adoption of Environmental, Social, and Governance (ESG)
practices among the emirate’s business community. The study sought to analyse the
motivations of companies, assess potential obstacles to ESG implementation, and
highlight the positive impact of responsible business practices.
The survey indicated that the main drivers of ESG adoption among participants
include both economic and value-based drivers. The top three economic drivers were
increased efficiency, maintaining competitiveness, and operational benefits, while the
three most prominent value-based drivers included a commitment to ethical business
practices, social responsibility, and demonstrating leadership in ESG.
The survey analysed the adoption of ESG practices among three categories of
companies including family businesses, multinational companies, and private
companies. The results indicated that the primary economic motivation for
multinational companies was to increase efficiency, while family businesses identified
enhanced efficiency and operational benefits as key economic drivers. Private
companies identified maintaining their competitiveness in the market as their top
economic driver.
In terms of value-based motivations, multinational companies
focused mainly on demonstrating leadership in ESG practices,
while family businesses highlighted the desire to be a socially responsible
organisation and commitment to ethical business practices as their key drivers. The
most prominent value-related motivation among private companies was a
commitment to ethical business practices.
The survey invited Dubai-based companies to measure their adoption of ESG
practices against four performance levels across a series of criteria. The
‘comprehensive’ level represented the highest level and referred to the adoption of an
integrated approach to ESG in all key areas. This was followed by the ‘solid’ level,
indicating a systematic focus on some practices; the ‘limited’ level, applied to
businesses using unsystematic methods to adopt certain practices; and, finally,
‘absent’ – the lowest level indicating the absence of a programme for ESG practices.
The results of the ‘ESG Pulse Survey,’ which was conducted by Dubai Chamber of
Commerce’s Centre for Responsible Business during the second half of 2023,
showed that 62% of participating companies have adopted ESG practices at a
‘comprehensive’ or ‘solid’ level, with 26% of companies selecting ‘comprehensive’
and 36% ‘solid,’ 36% of companies indicated that they have adopted ESG practices
at a ‘limited’ level, while 8% stated that they have not yet adopted an ESG
programme.
The analysis revealed that companies typically pursue ESG practices voluntarily
based on their recognition that this is the right choice to achieve the desired benefits.
The study also found that the publication of ESG reports is still in its infancy, as
implementation is generally hampered by a lack of adequate data. Although many
companies have commenced ESG reporting, almost a third of respondents in the
survey do not have a dedicated department or team responsible for overseeing the
implementation of ESG practices. In addition, some of the drivers and constraints of
these practices affect SMEs more than large companies, and their impact also varies
according to the type of ownership.
Leadership in Responsible Practices:
Commenting on the survey results, His Excellency Mohammad Ali Rashed Lootah,
President and CEO of Dubai Chambers, said: “Dubai continues to serve as a role
model in advancing corporate social responsibility as a key priority among the
emirate’s business community. We are keen to accelerate the adoption of ESG
frameworks by the private sector and ensure that these are implemented in line with
international best practices to deepen the contribution of organisations to society.”
His Excellency added: “The results of this survey indicate strong levels of awareness
and a commitment to the adoption of responsible business practices in the emirate.
The success achieved recently by Dubai and the UAE in hosting the COP28 summit
reflects the continuing drive to adhere to sustainable and responsible development
that creates a tangible positive impact in the best interests of the environment, the
economy, and society as a whole.”
The growing importance of ESG as a strategic priority for
organisations of all sizes has created a need for companies to
clarify the associated roles and responsibilities more transparently by identifying the
individuals responsible for executing ESG policies and practices. The study’s findings
indicate that institutional frameworks and incentives from key stakeholders have the
potential to accelerate ESG adoption among the Dubai business community and
highlight ways in which organisations could enhance their ESG data capabilities
including investing in technological solutions, training programmes, and data
governance frameworks.
Tailoring Approaches to Advancing ESG:
The report’s findings emphasise that there is no one-size-fits-all approach to
improving ESG practices, and that tailored measures should be employed according
to the size of the company and the type of ownership. Companies should therefore
focus on defining stakeholder perceptions and attitudes by enhancing transparency
and accountability for their non-financial performance through the adoption of
standardised practices and the outsourcing of ESG reporting. The analysis pointed to
the need for companies to focus on the knowledge that must be acquired and ensure
the credibility of their sources to promote ESG adoption, and also highlighted the
importance of developing systematic frameworks to measure the maturity of ESG
practices.
Dubai Chamber of Commerce’s Centre for Responsible Business plays a pivotal role
in promoting responsible and sustainable business practices in the emirate and is
committed to supporting and motivating companies to adopt ESG to enhance their
performance, competitiveness, and social and environmental contributions. The
centre provides a comprehensive range of platforms, tools, and access to knowledge
and expertise aimed at helping companies embed governance, sustainability, and
social responsibility throughout their corporate operations.
