UAE residents have very high expectations for businesses to act responsibly on environmental, social and governance (ESG) issues, according to SEC Newgate’s recent annual survey.
More than 14,300 people across 14 countries and territories were surveyed as part of the fourth annual ESG Monitor report from SEC Newgate, the global strategic communications, advocacy and research group, with regional offices in Dubai and Riyadh.
Findings showed the vast majority of people in the UAE (84 per cent) require companies to more clearly communicate what they are doing to improve their performance on ESG issues.
Fiorenzo Tagliabue, Group CEO of SEC Newgate, said, “Our global ESG Monitor has found that corporate communication shortcomings are clear to see, with a large majority believing companies need to more clearly communicate what they are doing to improve their performance on ESG issues and address stakeholder needs.”
67 per cent of people in the UAE believe that companies should act in the best interests of all stakeholders rather than prioritising shareholders ahead of other stakeholders.
UAE consumers communicate high expectations
Of those asked, 90 per cent of UAE participants have given an importance rating of 7 or more out of 10 for large businesses, and a similar rating (88 per cent) for small to medium businesses. These expectations are higher than what global consumers are demanding of corporations.
People care a lot about broader social and environmental issues, and significantly, 97 per cent said the UAE is on the right track: putting the UAE in first place and much higher than the global average of 47 per cent.
However, optimism is high in the UAE, and there is a strong belief (83 per cent) that performing well on ESG responsibilities doesn’t have to come at the expense of profitability.
Commenting on the findings, Elena Gramatica, Founder and CEO, SEC Newgate Middle East, said, “Despite other pressing concerns of the public in their day to day lives, most still see environmental, social and governance issues as important to address – even if they don’t view these through a formal ‘ESG’ lens. This is both a communication and operational challenge for businesses, so there is still more work to be done when it comes to ESG.”
Gramatica added, “However, there is great optimism in the UAE with people having a comprehensive understanding of ESG and the positive role that the government is playing and supporting corporations to be more accountable.”
“A considered approach is needed to overcome skepticism, with many not trusting what companies claim about ESG. Business is under intense scrutiny on ESG issues, but failing to act ambitiously and failing to be transparent about your plans and achievements on ESG issues poses a significant reputational risk.”
UAE consumers ‘share skepticism about ESG claims’
UAE respondents also overwhelmingly (67 per cent) shared that companies should act in the best interests of all stakeholders rather than prioritising shareholders ahead of other stakeholders.
Fiorenzo Tagliabue said, “Compliance with ESG reporting standards is just a starting point, it ensures business meets its regulatory requirements, but it does not signify excellence or an ambitious plan to drive impact through corporate operations.
Some of the additional key findings from the UAE included:
- Of those asked, 87 per cent think it’s important to transition to renewable/clean energy sources.
- 85 per cent think it’s important to act decisively on climate change.
“Clearly, a considered approach is needed to overcome skepticism, with many not trusting what companies claim about ESG. Business is under intense scrutiny on ESG issues, but failing to act ambitiously and failing to be transparent about your plans and achievements on ESG issues poses a significant reputational risk,” Tagliabue concluded.
