ESG and climate reporting in the UAE: the climate law, exchange guidance and what companies should do now

The United Arab Emirates has moved quickly from voluntary sustainability reporting to formal climate obligations. With a net zero by 2050 strategic initiative, a federal climate law and active stock exchanges, companies operating in the UAE now need reliable emissions data and a clear reporting process.

The policy direction

The UAE announced its Net Zero by 2050 Strategic Initiative in 2021, becoming the first country in the Middle East and North Africa region to commit to net zero. It hosted COP28 in Dubai in 2023, where the UAE Consensus on transitioning away from fossil fuels in energy systems was agreed. Its third nationally determined contribution, submitted in November 2024, commits to a 47 percent cut in greenhouse gas emissions by 2035 compared with 2019.

For companies, the direction is clear: climate performance is moving from a reputational topic to a regulated one.

The federal climate law

Federal Decree-Law No. 11 of 2024 on the Reduction of Climate Change Effects was issued on 28 August 2024 and entered into force on 30 May 2025. It applies to public and private entities operating in the UAE, including those in free zones.

The law requires entities to measure and report their greenhouse gas emissions, maintain records of their emissions data, and take measures to reduce emissions in line with national targets. It also addresses adaptation to climate change. Entities were given until 30 May 2026 to align with the law. Implementing decisions set out details such as thresholds, methodologies and reporting timelines, and the law provides for penalties for non-compliance.

For many companies, this is the first time emissions measurement has been a legal requirement rather than a voluntary choice. Companies should follow the implementing decisions issued by the Ministry of Climate Change and Environment and the relevant emirate-level authorities.

Listed companies and the stock exchanges

Listed companies face additional expectations. The Capital Market Authority, the name of the former Securities and Commodities Authority since 1 January 2026, expects listed public joint stock companies to publish sustainability reports. Abu Dhabi Securities Exchange (ADX) and Dubai Financial Market (DFM) both publish ESG disclosure guidance that sets out the metrics they expect, aligned with international frameworks such as GRI and the TCFD.

Investors in UAE companies, including international funds and lenders, increasingly expect climate disclosures that follow IFRS S2 and emissions data that has been independently verified.

Sector pressures

Beyond domestic regulation, UAE exporters face international requirements. Aluminium, steel and cement producers selling into the European Union are affected by the EU Carbon Border Adjustment Mechanism. Suppliers to multinational companies receive questionnaires asking for Scope 1 and 2 emissions and reduction targets. Real estate owners face green building requirements and tenant expectations. Banks are measuring financed emissions and asking borrowers for climate data.

What companies should do now

1. Establish a GHG inventory for Scope 1 and Scope 2 following the GHG Protocol, covering every UAE entity and facility.
2. Assign owners for energy, fuel, refrigerant and process data at each site, and collect it at least monthly.
3. Document methods and emission factors, using UAE grid factors for electricity, and check the requirements of the national MRV platform.
4. Screen Scope 3 to understand where value chain emissions sit.
5. Set reduction targets and a credible plan, starting with energy efficiency and renewable electricity.
6. Prepare for verification by keeping evidence attached to every number.
7. If listed, align the sustainability report with ADX or DFM guidance, GRI and IFRS S2.

How NCV helps

NCV is based in Dubai and works with companies across the UAE and the wider GCC. Our consultants build GHG inventories, ESG strategies and sustainability reports aligned to UAE requirements and international frameworks. SustainOS gives companies a single system for emissions and ESG data, with evidence, approvals and audit trails, ready for regulators, exchanges, lenders and customers.