Qatar's progressive ESG journey: PwC report highlights key developments and future plans

• Qatar’s environmental, social and corporate governance (ESG) development is evident in its recent accomplishments and future plans

• Qatar’s mission to host first carbon-neutral FIFA World Cup, development of smart cities and ambitious solar projects is a testament to the nation’s commitment towards ESG practises

• In recent years, government bodies such as the Qatar Financial Market Authority (QFMA) and Qatar Stock Exchange (QSE) have played a significant role in encouraging listed companies in the country to adopt and report on their ESG actions

Doha, Qatar – 4 April 2023: As ESG developments continue to transform the Middle East, Qatar has rapidly accelerated measures taken to stimulate ESG development in recent years. The increased momentum has galvanised the appetite for a legal framework to underpin these developments, with Qatar’s ambitious economic diversification plan being the driving force in embracing ESG-related opportunities, while ushering in new legislations and increased regulation, according to a new PwC report. 

The comprehensive study examines the legal landscape underpinning the nation’s substantial progress in ESG initiatives and highlights the regulatory advances driving growth and ambition in the country. Among the report's key findings, PwC underlines the pivotal role of the Qatar National Vision 2030 (QNV 2030) in protecting the environment, promoting social justice, and ensuring corporate governance and responsible business practices.

Despite Qatar possessing vast natural gas reserves and having one of the world’s highest GDPs per capita, it has actively taken steps to diversify the local economy and reduce its reliance on hydrocarbons. The nation’s winning bid to host the FIFA World Cup 2022 is a testament to its economic diversification efforts and has led to a decade of rapid development in non-oil sectors, namely construction, transportation, infrastructure, tourism, and sports. 

In parallel, the trajectory of QNV 2030 continued with the incorporation of ESG considerations into various legal structures, including the 2015 Commercial Companies Law and its 2021 Amendment, the Qatar Financial Market Authority (QFMA) Corporate Governance Codes, the Qatar Stock Exchange (QSE) ESG Guidelines, and recent reforms in labour laws - all of which have contributed significantly to Qatar’s economic transformation growth. 

From a sustainability standpoint, Qatar also used the World Cup to showcase many bold environmental initiatives, including hosting the first carbon-neutral tournament in the competition's history- introducing several innovative sustainability measures and incorporating sustainable construction practices. Furthermore, Qatar’s geographic position and arid desert climate make the nation particularly vulnerable to climate change. This has also further driven the nation’s focus on environmental sustainability, with the establishment of The Ministry of Environment and Climate Change (MECC) in 2021, in addition to the launch of Qatar's inaugural green bonds, advancements in sustainable financing, the creation of 'Smart Cities' like Msheireb and Lusail–specifically designed to maximise sustainability and minimise emissions–and crucial initiatives like the 800MW Al Kharsaah Solar Power Plant, sufficient to provide about 10% of the country’s peak electricity demand.

Commenting on the launch of the report, Bassam Hajhamad, Qatar Country Senior Partner and Consulting Leader at PwC Middle East, said, “Encouraged by the successful hosting of the world's first carbon-neutral FIFA World Cup and building on the foundation laid by the QNV 2030, Qatar’s government has increased measures taken and investments in recent years towards a sustainable economic transition, which is a testament to their ESG commitment – making the nation a more attractive global FDI and talent destination.”

The report also sheds light on the growing focus on social responsibility in Qatar under the ESG framework, showcasing advancements in numerous social sectors such as education, health, gender, disability, and labour rights. In addition, the amendment of labour laws, implementation of a minimum wage, regulations allowing for job changes, the ban on passport confiscation, enhanced employer-employee transparency, and the ongoing expansion of heat stress protection measures further demonstrate Qatar’s commitment to social development.

Qatar has also undertaken measures to ensure good corporate governance and transparency. For example, the Qatar Financial Markets Authority (QFMA), which supervises listed companies, issued its Governance Codes to ensure that both Main Market and Venture Market companies comply with applicable corporate governance requirements. Furthermore, the Qatar Stock Exchange published its ESG Guidance in December 2016 to assist all listed companies wishing to incorporate ESG reporting into their existing disclosures. Although ESG reporting is currently voluntary, the QSE encourages listed companies to engage in ESG reporting and has indicated that a transition to a mandatory reporting regime is likely.

Ahmad Anani, Partner Middle East, Legal Business Solutions Leader, PwC Middle East, said: “From our discussions with clients, we know that companies are still in a ‘start-up’ mode when it comes to ESG strategy and implementation. However, according to our research, 86% of large companies say increased ESG regulation would strengthen and accelerate the implementation of their own ESG strategies. Considering the efforts made by the government in recent years, we are confident Qatar is on the right track towards embedding ESG principles across all areas of economic and social evolution. At PwC, we are focused on helping our clients develop, navigate and encourage compliance with ESG frameworks and regulations, that help them move towards a decarbonised and more sustainability-focused future in line with national targets. We play the role of the educator to spread awareness by translating these topics into reality and accelerating action by showcasing different areas of ESG implementation into businesses and the wider community.”

PwC’s global strategy, The New Equation, enables our community of solvers to support government and public sector clients as they pursue their powerful national agendas, addressing their needs to respond to the rapid changes taking place globally while building public confidence and trust  - delivering sustained outcomes for organisations, stakeholders and communities that make a positive and sustainable impact. We believe that ESG imperatives will accelerate the massive and fast transformation of our region, and support our clients in transforming their business model to decarbonise its value chain, increase transparency, and support the development of strong ESG reporting frameworks and standards. To learn more about PwC Middle East’s ESG-specific insights and services, kindly access the link here.