The Securities and Commodities Authority (SCA) has introduced mandatory Environmental, Social, and Governance (ESG) disclosure requirements for all companies listed on the Dubai Financial Market (DFM) and Abu Dhabi Securities Exchange (ADX).

Compliance Framework

1. ESG Reporting Standards – Companies must align disclosures with the internationally recognized Global Reporting Initiative (GRI) framework.

2. Climate Risk Transparency – Adopting the Task Force on Climate-related Financial Disclosures (TCFD) guidelines is compulsory to ensure clear reporting of climate-related financial risks.

3. Net-Zero Commitments – Organizations must establish detailed, time-bound strategies to achieve carbon neutrality, in line with the UAE’s national sustainability goals.

Operational Impact

• Non-compliance risks include regulatory penalties, reduced investor confidence, and reputational harm.

• The UAE government has introduced financial incentives to accelerate ESG adoption and integration into corporate strategies.

Strategic Imperative for Businesses

The UAE’s mandatory ESG reporting framework reinforces its commitment to sustainable economic development and alignment with global climate goals. By embedding GRI and TCFD standards, the SCA aims to enhance corporate transparency, strengthen investor trust, and drive progress toward net-zero emissions.

Beyond regulatory compliance, businesses that proactively integrate ESG principles can mitigate risks, enhance resilience, and capitalize on emerging investment opportunities. Companies are encouraged to view these requirements as a strategic advantage, leveraging available incentives to align operations with the UAE’s sustainability vision.

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