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Gulf’s sustainability consulting market set to hit $1.3bn by 2025

Volunteers take part in a mangrove clean-up in Abu Dhabi, protecting the trees and shrubs that are great at storing carbon Vidhyaa Chandramohan/Sopa Images/Sipa USA
Volunteers take part in a mangrove clean-up in Abu Dhabi, protecting the trees and shrubs that are great at storing carbon
  • Demand for eco-expertise is growing quickly across Middle East
  • More companies are seeking advice to understand and minimise impact
  • Net zero policies and ESG targets are driving focus on green indicators

Middle Eastern companies are calling in expert advisers to help them improve their environmental performance and analyse carbon-tracking and other sustainability indicators.

As national carbon reduction policies roll out across the Gulf, the region’s market for sustainability consulting is forecast to grow by 10 percent each year between now and 2025, according to a report by UK-based research firm Source. The sector is expected to be worth $1.3 billion in 2025.

Source’s chief executive Fiona Czerniawska said: “The most popular area of focus for companies across the Middle East currently is investing in data and analytics to better understand their performance when it comes to sustainability. 

“Businesses are also acting to measure their impact on the environment. They want to model how they can improve and capitalise on opportunities in a cost-effective way, while fulfilling their reporting requirements.”

The Middle East was the world’s fastest-growing region for sustainability consulting in 2021, with its market expanding by 14.4 percent that year to reach $1.2 billion. Within that, the GCC’s sustainability consulting market grew to $1 billion in 2021 and was estimated to have grown 12.5% to $1.2 billion in 2022.

Asia-Pacific was the second fastest-growing region, achieving 12 percent growth in 2021. It is also expected to expand by 10 percent year-on-year until 2025, to reach $8.3 billion. 

North America and Europe remain the largest markets for sustainability consulting. They are expected to grow at an annual rate of 8 percent to reach $15.4 billion and $13.7 billion respectively by 2025.

Globally, the market grew 10.1 percent in 2021 to reach $41.2 billion and is predicted to grow 8 percent to reach $49.6 billion. 

Corporate staff take part in a mangrove planting event organised by Companies for Good on Jubail Island in Abu Dhabi. ESG targets are prompting businesses to consider their impact on the planet. Picture: Vidhyaa Chandramohan/Sopa Images/Sipa USA
Corporate staff take part in a mangrove planting event organised by Companies for Good on Jubail Island in Abu Dhabi. ESG targets are prompting businesses to consider their impact on the planet. Picture: Vidhyaa Chandramohan/Sopa Images/Sipa USA

As with the other regions, Middle East sustainability consulting work has been “driven mainly by the central role of green IT, data and analytics, and the other technologies that are helping clients track and limit carbon emissions to meet ESG [environmental, social and governance] targets,” according to Source. 

In Source’s research, almost two-thirds (60 percent) of clients surveyed said the effective adoption and use of technology would be a significant factor in their ability to act more sustainably.

Half of clients had already made “significant” investments in this space and 60 percent plan to do so over the next three years. 

Swiss wealth manager Lombard Odier also reported increased preference for “sustainable” investments among the Middle Eastern high net worth individuals it surveyed in 2022. 

Jeffrey Beyer, founder and chief executive of Dubai-based sustainability consultancy Zest Associates, said: “The political commitment to sustainability and climate action has strengthened enormously over the past two years, and companies in the region are responsive to government signalling and are looking for help from consultancies to act quickly on that. 

“They recognise the risk of diving headfirst into a sector they don’t yet fully understand, and want specialist support to distinguish trends from strong fundamentals, and understand what part of the value chain matches their risk preference and complements their core competencies.”  

Compilation and analysis of data to prove ESG performance to stakeholders and investors is becoming ever more critical.

“The first big push for many companies is centred on data gathering, understanding ESG baselines, and preparing a first ESG report, initially for internal information, but ultimately with a view for public disclosure,” said Beyer. 

Disclosures are fast becoming an expectation among investors – especially those in more strictly regulated Europe but increasingly in emerging markets such as the Middle East, which are bringing their corporate governance regulations in line with global standards. 

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Clarity AI is working with Saudi Arabia’s Ministry of Economy and Planning to help companies use big data to deliver environmental insights

“Many companies are looking for help to understand the materiality of each issue, benchmark their performance against peers, and set realistic targets that boost their competitiveness. Larger companies are looking to [use data] to boost their overall ranking on ESG indices,” Beyer said.

Another growth driver for regional sustainability consultancy is that climate change is both a threat and an opportunity. High carbon-emitting products or services – of which there are plenty in a region where hydrocarbons remain a significant driver of economic growth – are threatened by strict regulatory regimes and changing individual preferences. Yet the need for low-carbon solutions is a significant commercial opportunity. 

Beyer said: “Sustainability consultants play a role in helping companies think through both sides of the coin: how to minimise risk while capitalising on the opportunity.”  

Adnoc is attempting to monetise the UAE’s decarbonisation strategy by setting up a unit for low-carbon solutions and international business.

Meanwhile, there are plenty of technology companies tapping the Middle East’s fast-growing consultancy market. In November North American specialist mCloud appointed Saudi entrepreneur and sustainability strategist Dina Alnahdy to its board as part of a regional expansion drive. 

Last week Clarity AI signed a pledge with Saudi Arabia’s Ministry of Economy and Planning to help companies use big data to deliver environmental and social insights to consumers and investors. 

“The demand for sustainability data and technology is clearly growing, globally and also in the Mena region, and it is true that most of our clients and prospects also mention the need for skills/knowledge in the area, and advisory or consulting services,” said Rebeca Minguela, founder and chief executive of New York-based Clarity AI.

“Companies and investors require more support to keep up the pace in a fast-evolving sustainability sector, in which regulation is also becoming more sophisticated and strict.”