A focus on alternative energies is creating markets where sustainability can lend itself to economic growth ©PA Images
A focus on alternative energies is creating markets where sustainability can lend itself to economic growth ©PA Images

Middle East sees 'real opportunity' in sustainability

posted by Francis Churchill
20 February 2018

Businesses in the Middle East are among the most prepared to invest in improving sustainability in their supply chains, a global survey of SMEs has found.

More than a third (36%) of SMEs in the UAE and Saudi Arabia have sustainability as one of their top three long-term objectives, second only to Indonesia, the HSBC research found.

However, while this showed an acknowledgement about the importance of sustainability, there is very little specific action taking place, according to Bryan Pascoe, global head of client coverage at HSBC Commercial Banking.

Speaking to SM, Pascoe said: “It’s still in a relatively early stage in terms of the maturity around how large regional companies, let's say, are engaging with their supply chain in terms of improving carbon emissions, better behaviour, etc.

“[But] I think there was definitely a clear message that this is something the UAE and Saudi in particular, based on that poll, see as a real opportunity going forward, and where they’re going to invest significantly to ensure that they are on the right side in their businesses and focusing on the right things.”

One of the key driving forces in the growing importance of sustainability is the structural move many economies in the region are making away from oil dependency, said Pascoe. A focus on alternative energies and technology-focused economies are creating markets where “sustainable approaches and strategies really lend themselves to economic growth”.

“When we’re talking to customers in areas like healthcare, areas like manufacturing development, buildings and corporate real estate, in all of these areas there’s a very, very strong focus on how they can develop their businesses in a way that aligns with sustainability principles that are coming out,” said Pascoe. These include domestic agendas including Saudi Arabia’s Vision 2030 and Dubai Vision 2021, as well as international agreements including the 2015 Paris climate agreement.

China’s Belt and Road Initiative is another driver of sustainability. As China looks outwards, said Pascoe, they are “increasingly focusing on sustainability being a core pillar of how they want to export their industry”. 

He said: “I think we’re seeing that gain quite a lot of traction on the ground in the region on the basis of some of those developmental and infrastructure-focused projects.”

The expansion of large global companies, with their own sustainability agendas, could also drive sustainability through the supply chain. “What we’re hoping to see is the likes of Unilever, Philips, or GE, or Siemens who clearly have targets and objectives in that space. Hopefully as they use regional supply chains for the provision of services for their regional businesses, they will help to improve that cultural change, as well by importing global standards into the region,” said Pascoe.

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