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Please see today’s daily update from EPIC Investment Partners received this morning:

The Middle East is experiencing a remarkable transformation in sustainability, with 2024 marking a watershed year for ESG across the region. Businesses are spearheading this change, rapidly transitioning from ambitious goals to tangible actions and reshaping industries and economies. 

A recent survey by PWC reveals impressive progress: 80% of companies now have formal sustainability strategies, up from 64% in 2023. Over half have fully integrated these strategies into their core operations. Leadership is driving this change, with 50% of companies either having appointed a Chief Sustainability Officer or planning to do so within a year. 

Climate action is at the forefront, with half of all surveyed companies pledging to achieve carbon neutrality within realistic timeframes. This significant increase in net-zero commitments showcases the region’s determination to address climate change. Transparency is also improving, with over 40% of companies producing comprehensive sustainability reports and an additional 24% disclosing selected ESG metrics. 

Innovation plays a crucial role, as companies explore cutting-edge technologies like GenerativeAI to enhance their sustainability efforts. The financial sector is supporting this green transition, with a growing number of companies accessing green loans and bonds. This trend is bolstered by significant initiatives like the UAE’s USD 30bn ALTÉRRA climate investment fund. 

Collaboration is key, with the private sector actively seeking partnerships to drive the sustainability agenda forward. Consumers are aligning with this shift, showing willingness to pay premiums for sustainably produced goods. Companies are recognising the economic benefits of sustainable practices, with some state-owned organisations demonstrating significant cost savings and competitive advantages. 

Looking ahead, there’s a growing focus on sustainability education and upskilling to ensure the region has the expertise needed to maintain momentum. While challenges remain, the Middle East is positioning itself as a leader in sustainable development. 

With many of the countries in the region, e.g. Abu Dhabi and Qatar, ranking amongst the wealthiest in the world, and with the growing focus on sustainability, the Middle East is an attractive hot spot for fixed income investment. Discerning investors seeking both returns and alignment with sustainable practices are finding the region increasingly attractive.  

Please continue to check our blog content for the latest advice and planning issues from leading investment firms.

Charlotte Clarke

09/07/2024