Business focus on sustainability picks up speed in MENA region

Business focus on sustainability picks up speed in MENA region

Environmental, Social and Governance (ESG) principles are increasingly integrated into the business strategy of private companies and used to benchmark their performance. EFG Hermes, a financial services corporation in the Middle East and North Africa (MENA) region, was recently named as one of six MENA constituents in the FTSE4GOOD Emerging Index. Launched in December 2016 to measure the performance of emerging market companies who have demonstrated exemplary ESG practises, the index includes over 300 indicators and criteria across 14 themes such as climate change, water usage, human rights & community, labour standards, health & safety.  In addition to validating a firm’s commitment to global best practises in ESG, it is used as a transparent and objective performance benchmark for potential investor.

Companies willing to take risks in sustainable development are creating new markets. This was recently emphasized at the World Government Summit (WGS), a gathering of more than 4,000 personalities from 139 countries, held in Dubai from 12 - 14 February 2017. Pointing to the private sector’s increased focus on sustainability, Dimitris Tsitsiragos, Vice President of New Business at the International Finance Corporation (IFC), said: “Sustainable business models used to be seen as risky and costly, but increasingly less so now. We believe that development and profitability go hand in hand, and we see companies willing to take risks in sustainable development and creating new markets. According to one study, UN Sustainable Development Goals (SDGs) could open up 60 of the world’s biggest market hotspots, worth up to US$12 trillion a year in business savings and revenue.”

“The private sector is best placed to deliver the sustainable, inclusive growth that the Middle East and North Africa (MENA) region needs.”  This was the focus of a keynote speech on the private sector in the southern and eastern Mediterranean (SEMED) region, delivered by Suma Chakrabarti, President of the European Bank for Reconstruction and Development (EBRD). To date, the EBRD has invested around €5 billion in about 120 projects in the SEMED region, namely in Egypt, Jordan, Morocco and Tunisia. Three-quarters of these investments have been dedicated to the private sector, with a special focus on promoting renewable energy and energy efficiency, a key for the growth of the private sector and contributing to the energy security of the region.