“Governance and sustainability” enhance the financial performance and competitiveness of companies

Hossam Abdel Nabi (Dubai)

Sustainability experts and company CEOs unanimously agree that companies’ commitment to applying environmental, social and institutional governance practices is reflected in many benefits, the most important of which is driving revenue growth, strengthening the company’s brand, and increasing its ability to attract capital, while increasing the company’s sustainable growth opportunities. Governance and sustainability practices can contribute to the competitiveness and expansion of companies’ horizons of success in many ways.
They told Al-Ittihad: The areas of environmental, societal and institutional governance positively affect financial performance, especially that completely changing the features of economic sectors would generate new waves of growth, in addition to that they will serve as the main pillars of digital transformation in the coming years, and will enable companies to Meeting the evolving demands of customers, especially since there is a general desire and awareness among consumers about the importance of companies operating in a sustainable manner, as well as giving priority to purchasing the products of companies that adhere to those standards, noting that integrating environmental and social practices into the operating model, especially within supply chains, achieves gains.
They added that companies’ integration of environmental, social and corporate governance (ESG) considerations into their approach and operational processes requires work to find measurable reference standards in the UAE.

Revenue growth
For his part, Bhavya Kumar, director and partner at the Boston Consulting Group, said: According to a report issued by the company entitled “Global Retail Banking 2022: Awareness and Sustainability,” payments, mortgages, and deposit products, in addition to governance practices, are likely to contribute. environmental, community and institutional, in driving the path of bank revenue growth across the retail banking sector in the GCC countries during the five years extending to 2026, stressing that the areas of environmental, community and institutional governance will be the main pillars of digital transformation in a quarter of the retail banks surveyed, while they constitute These practices are a basic criterion for selecting and adopting digital transformation initiatives in 38% of other banks.
Kumar stated that sustainability will quickly reshape the concept of competitive advantage, and contribute to defining new standards that completely change the features of economic sectors, in addition to creating new waves of growth.
He explained that despite the importance that environmental, social and corporate governance practices have been acquiring for a long time at the business level, it is considered one of the basic features that must be adopted in the framework of dealing with customers and other stakeholders in the current developed market scene, stressing that banks possess enormous capabilities that enable them to Promoting sustainable behaviors among customers, in addition to contributing vitally to supporting the UAE’s ambitious agenda for sustainable development, as products related to environmental, social and institutional governance standards provide banks with the ability to transform the sector’s directions and move forward to achieve the desired goals, in line with the forward-looking visions for the future more sustainable.

prospects for success
Dr. Ahmed Hassan bin Al-Sheikh, Chairman of the Board of Directors of the Hawkamah Institute, affiliated to the Dubai International Financial Center Authority, stated that the development and implementation of an integrated program of environmental, social and corporate governance practices can contribute to expanding the horizons of companies’ success in multiple ways, including attracting capital, enhancing its brand, and increasing its opportunities for sustainable growth that benefits the company, investors alike, and all stakeholders associated with the company.
He added that the concept of environmental, social and corporate governance practices is usually closely associated with climate change, but there is a wider range of other fundamental issues influencing, including institutional culture, safety of the work environment, the solidity of supply chains, and equality, indicating that these factors confirm The importance of environmental, social and corporate governance practices as a key operational and strategic factor in ensuring the competitiveness and success of companies.

best practices
Pal Krishn, Chairman and CEO of Century Financial, stated that in response to the UAE’s declaration of 2023 as the “Year of Sustainability”, the company will launch several programs that will be implemented over the next few months, which will promote sustainable best practices in the financial field. . He explained that the company’s sustainability agenda focuses on establishing strategic partnerships with similar-minded institutions in the region under the slogan “You and Sustainability”, noting that these initiatives, which focus on the effective participation of the financial community, seek to create a strong business system that will enhance environmental and social governance efforts. companies (ESG) across the region.
He said: The company has appointed a Director of Sustainability, with the aim of launching environmental, social and corporate governance (ESG) initiatives and leading them successfully, and to bring about a quantum leap by leading the regional financial sector and mobilizing its forces by taking decisive and effective climate measures to reach a carbon-free future.

Governance application
In turn, Ahmed Abdel-Al, CEO of Mashreq Bank Group, said: Between January 2021 and December 2022, Mashreq provided facilities amounting to $15.5 billion in sustainable financing and investments related to climate change adaptation, including other project facilities. wastewater treatment at a value of $1.36 billion, confirming Mashreq’s leadership in the region in sustainable financing, announcing that it aims to increase the volume of sustainable financing to $30 billion by 2030, in addition to the bank’s endeavor to expand the range of supply chain financing products and services to help Its customers are committed to adopting responsible and sustainable supply chain and practices that support their environmental, social and corporate governance objectives.
Abdel Aal added that Mashreq recently hosted the “Impact of Environmental, Social and Institutional Governance and Modern Supply Chains” event, with the aim of seeking to formulate visions and ideas on the role of environmental, social and institutional governance (ESG) and its applications within supply chains. This event constituted a platform for business leaders, investors and regulators to define Innovative ways to improve the sustainability of their supply chains.

Emissions disclosure
Raja Atwi, Partner, Member of the Sustainability and Responsibility Sector at Bain & Company Middle East, said that with the climate action showing signs of improvement for companies in various sectors, the larger business community in the region needs to adopt consistent and transparent emissions disclosure policies, in addition to emissions reduction targets. .
He stated that the Bain & Company data shows that the main players in the market are already taking steps to reduce emissions, increase renewable energy sources, and expand the scope of low-carbon technologies, as half of the companies analyzed have initiated environmental, social and corporate governance reports. About 12% of them have declared ambitions related to reaching net-zero carbon emissions, while only 6% of companies have defined their road map.

Upgrading the ratings
Salwa Al-Maflahi, Director of Sustainability and Corporate Social Responsibility at Aldar Properties, revealed the company’s success in upgrading the annual ratings in environmental, social practices and corporate governance within 3 indices: “Sestinalistics”, “Morgan Stanley Capital International” and “Dow Jones Sustainability”. Gains continue to be made as a result of the company’s integration of environmental, social and corporate governance practices into its operating model, due to improved data disclosure, governance and risk management practices, as well as improved supply chain and environmental management.
Al-Maflahi believes that the wide improvement in the company’s ratings within environmental, social and corporate governance practices reflects its efforts to improve the quality of data in all areas, and success in enhancing risk and governance processes, stressing that this remarkable progress represents irrefutable evidence of Aldar Properties’ commitment to reducing energy use and improving quality life in its communities, and the promotion of diversity and inclusiveness, and the company’s realization that it has to take more necessary measures to continue to improve the company’s evaluation within the indicators of environmental, social and corporate governance practices.

standards system
The e&Etisalat Group announced, during its participation in the World Economic Forum, that it will continue its commitment to follow environmental and social governance standards, by joining the stakeholder capitalism standards system issued by the World Economic Forum, to join more than 100 international companies in the system aimed at aligning performance reports with environmental, social and governance indicators, and continuously measure their contributions against the United Nations Sustainable Development Goals.
Hatem Dowidar, CEO of e& Group, said: The group’s strategy works to develop the sustainability agenda, in addition to its keenness to provide a diverse and comprehensive work environment, and to maintain ethical and transparent business practices, noting that the group seeks through its environmental, social and governance objectives, to implement the giving approach. For the societies in which they exist, enable a secure digital future, and pursue plans aimed at reducing carbon emissions within the business, to lead global efforts in this field.