Top ESG Trends of 2025: From Decarbonization to Transparency in the UAE and Saudi Arabia

In 2025, ESG practices continue to evolve significantly, with companies and investors in the UAE and Saudi Arabia increasingly recognizing the importance of sustainable development. This recognition leads to strengthened regulation and higher reporting standards, making ESG a critical component of business strategies.

Global ESG Trends in 2025

Strengthening Regulation and Reporting Standards

In 2025, there is a notable increase in regulatory acts requiring companies in the UAE and Saudi Arabia to disclose their ESG activities. Leading regions such as the EU, UK, and Canada are tightening ESG reporting requirements, and this trend is also gaining momentum in the Middle East. The implementation of IFRS S1 and S2 standards, developed by the International Sustainability Standards Board (ISSB), is a significant step towards unifying reporting practices, enhancing transparency and comparability of company data on a global scale.

Transition to Decarbonization and Value Creation Opportunities

Global carbon markets are becoming essential tools in the fight against climate change. In 2025, carbon trading reaches new heights due to stricter regulations and the pressure to achieve carbon neutrality goals. Companies in the UAE and Saudi Arabia that can generate carbon credits through reforestation and renewable energy projects are gaining additional revenue streams and strengthening their reputation among investors and consumers.

Sustainable Supply Chains

In 2025, the sustainability of supply chains becomes a strategic priority for businesses in the UAE and Saudi Arabia. Companies face increasing pressure to demonstrate the environmental and social responsibility of their value chains, including issues related to carbon emissions, labor conditions, and resource use.

Integration of Technology in ESG

Artificial Intelligence (AI), blockchain, and the Internet of Things (IoT) are actively used to optimize resources and efficiently manage processes related to sustainable development in the UAE and Saudi Arabia.
AI-driven analytics help identify operational inefficiencies and develop sustainable development strategies based on the data obtained. This assists companies in making informed decisions and contributing to the achievement of common goals.
The application of modern technologies such as AI, blockchain, and IoT enhances the transparency and efficiency of processes related to sustainable development. They allow for the optimization of resource use, reduction of negative environmental impact, and creation of a more sustainable economy in the region.

Investor Demand for Authentic ESG Methods

Investors in the UAE and Saudi Arabia are paying close attention to ESG standards, demanding transparency and verifiable results from companies. Due to the risks of the “green” economy, investors expect ESG data to be verified by independent third parties. To maintain investor trust and attract capital, companies must demonstrate real progress in achieving sustainable development goals.
 

Public-Private Partnerships

Governments, businesses, and international organizations in the UAE and Saudi Arabia are joining forces to address global sustainable development challenges. Initiatives such as the UN Sustainable Development Goals (SDGs) play a key role in coordinating these efforts, emphasizing the importance of partnerships to enhance impact, especially in combating climate change and transitioning to clean energy sources. In the era of digitalization and globalization, issues of ecology, social responsibility, and corporate governance are becoming increasingly relevant. Consequently, there is growing interest in initiatives aimed at achieving sustainable development, such as the SDGs. They help governments, enterprises, and international organizations coordinate their efforts and achieve common goals. Climate change, environmental pollution, social inequality—these problems require joint solutions. Partnership and collaboration between different sectors of society are becoming key to success in achieving sustainable development. This is particularly important in areas such as combating climate change and transitioning to renewable energy sources.

Looking ahead

In 2025, ESG trends continue to have a significant impact on global and regional business, including the UAE and Saudi Arabia. Strengthened regulation, increased transparency, and enhanced social components are becoming key aspects of sustainable development. To successfully adapt to these changes, companies need to actively implement ESG practices and increase their level of responsibility towards society and the environment.

If you want to learn more about how to adapt your company to modern ESG trends in the UAE and Saudi Arabia, we invite you to sign up for a consultation.