Although the onus of driving sustainability in a nation rests with the government, it simply cannot be done without meaningful co-operation from and willingness of the private sector. They are integral behind providing the ecosystem with funding, investing in research and development, deploying cutting edge technology, facilitating data sharing, and international collaboration.
ROI for the Private Sector Going Green
However, many companies have limited their sustainability efforts to donations and mere tokenism. Researchers have now proven that Return on Investment (ROI) cannot be simply equated with financial profits. Treating sustainability as the strategic imperative of any organization results in several direct benefits -
- Increased resilience and agility
- Greater carbon efficiency and reduced carbon footprint
- Social value and impact
- Robust stakeholder engagement and community relations
- Improved customer relationships and brand loyalty
- Retention of employees
- Enhanced brand value and reputation
The private sector has the opportunity to invest in the "wellbeing economy" worth over $4.3 Trillion. According to Ibrahim Al Zubi, Chief Sustainability Officer at Majid Al Futtaim, corporates, businesses, and SMEs need to reach a "net positive" business model.
The model incorporates a triple bottom line approach:
- Planet - Resources are treated as finite and used efficiently to allow the earth to replenish what we take.
- People - Creating an ecosystem where people are treated as human capital, and their wellbeing and health is nurtured.
- Profit - The synergy between a happy community and a healthy planet helps drive more profit, which is not just financial but sustainable and has a net positive social impact.
The triple bottom line approach looks at the Sustainable Development Goals as part of a structural framework from inception to implementation instead of a cog in the corporate social responsibility machine. It has been proven that incorporating sustainability makes logical business sense. Globally, consumers are becoming more brand and sustainability conscious. Nielsen reported that sales of consumer goods from brands that had demonstrated a commitment to sustainability were up by more than 4% globally.
Research shows that the MENA region's private sector is still relatively slow when it comes to sustainability practices. However, a few outliers are leading the charge and making change happen.
- Cities like Dubai and Amman are spearheading the sustainability movement with extensive policy and structural changes to reduce the carbon footprint of local power generation by 70%.
- UAE's second-largest industrial company, Emirates Global Aluminium, launched its first sustainability report in August 2017.
- The largest company in the UAE, Emirates National Oil Company, has also dedicated renewable energy investments worth $6 billion, according to their 2019 energy report.
- Saudi Basic Industries Corporation, a subsidiary of Saudi Aramco, is also the world's largest petrochemical manufacturer. Over the past 5 years it has invested approximately $1.2 billion to complete more than 170 initiatives to meet the targets set by the Saudi Energy Efficiency Program.
- Majid Al Futtaim, the leading owner and developer of shopping malls, retail, and leisure establishments in countries in the MENA region, boasts a 7% decrease in water usage, a 32% increase in recycling rate, and a 4% reduction in carbon emissions.
Private companies need to increase their efforts on:
- Being green certified
- Incorporating water recycling circulation
- Implementing energy management systems
- Building and creating an energy-efficient, insulated design
- Increasing access to renewables
But there are 2 critical roadblocks:
- Funding for research and development is vital
- Sustainable technologies must be scaled up
Sustainability Reporting as a Necessity
Stakeholders are becoming increasingly environmentally conscious and want to identify the social, economic, and environmental impact of any organization. Hence companies are now required to report environmental, social, and governance (ESG) issues and their impact on their business.
Transparent reporting is vital for all public, private, non-profit, and civil sector organizations to achieve the following:
- Establish a baseline
- Measure the change in their ESG performance
- Set goals and develop strategies
The Bottom Line
The coronavirus pandemic has taught the world the importance of resilience, adaptability, and agility. According to sustainability experts, the climate crisis is also nothing short of a pandemic. Globally, monumental decisions like shutting down office buildings, a drastic reduction in transport, and working from home prove change is always possible. According to a projection by the Organisation for Economic Co-operation and Development projection, carbon dioxide emissions in 2020 may decline by 0.3% to 1.2%, with European and Asian cities seeing a drop in Nitrogen Dioxide levels too. The private sector's eager involvement is crucial in the global attempt to mitigate the climate crisis.