For years, environmental, social and governance (ESG) reporting in the UAE was something businesses chose to do, driven by investor expectations, global best practices and a desire to stay ahead. That's changing. The new federal climate legislation of 2024 on the Reduction of Climate Change Effects, stock exchange requirements and financial centre frameworks are making ESG reporting a regulatory obligation, not a voluntary exercise.
This blog breaks down what's changed, who's affected and what you actually need to do, whether you're a listed company, a financial services firm or a private business operating in a free zone like DMCC.
Why ESG matters for UAE businesses
ESG has moved from a voluntary reporting exercise to a regulatory requirement in the UAE. But regulation is only part of the picture. For most businesses, the commercial pressure is just as real. The business case is already here.
59% of businesses now expect poor ESG performers to be removed from their supply chains.
Source: DMCC Future of Trade 2024 report
The same report, citing EY research, found that over 90% of enterprise greenhouse gas emissions sit in supply chains, representing 50 to 70% of operating costs. With the next edition of the Future of Trade report due in 2026, these numbers are only expected to sharpen. Simply put, if you can't demonstrate your ESG position, you risk losing contracts with clients who need their own supply chains to be clean.
Internationally, the pressure is growing too. The EU’s Carbon Border Adjustment Mechanism (CBAM) entered its definitive compliance phase on 1 January 2026. According to the European Commission, CBAM currently covers imports of cement, iron and steel, aluminium, fertilisers, electricity and hydrogen. EU importers must now purchase and surrender CBAM certificates to cover embedded emissions. For UAE businesses exporting these goods to Europe, that means providing verified emissions data or facing costs linked to EU ETS carbon prices.
This is the context in which UAE regulators have moved. ESG disclosure isn’t just about ticking a box; it’s about staying competitive in a market that increasingly demands it.
What are the UAE’s ESG reporting requirements?
ESG reporting obligations in the UAE vary by regulator, depending on your company type, listing status, and jurisdiction. Here are the four main layers.
1. UAE Decree Law No. 11 (for all UAE entities)
This law came into force on 30 May 2025, making the UAE the first country in the Middle East and North Africa to establish a binding legal framework for climate action, according to the US Library of Congress.
The law applies to all public and private sector entities whose operations or activities result in the release of greenhouse gases, including those operating in free zones. It requires organisations to measure, report and retain greenhouse gas emissions data, with penalties for non-compliance ranging from AED 50,000 to AED 2,000,000 per violation. However, the operational guidelines that will determine how the law is applied in practice have not yet been issued.
The broader direction is clear: climate reporting in the UAE is moving from voluntary to mandatory. Whilst this focuses more on the environmental side of ESG, the regulatory layers below show that social and governance reporting requirements are also growing across the UAE. The law has been in force since May 2025, but the implementing resolutions from the Ministry of Climate Change and Environment that will set out specific reporting methodologies, requirements and timelines have not yet been published. Until these are issued, the practical obligations for businesses remain unclear. You can read the full text of the law on the UAE Legislation portal.
The law sits within the UAE’s broader Net Zero by 2050 strategic initiative, a national commitment to achieve net-zero emissions by mid-century.
2. SCA requirements (for listed companies on DFM and ADX)
If your company is listed on the Dubai Financial Market (DFM) or Abu Dhabi Securities Exchange, you have additional ESG reporting obligations. Under Article 76 of the SCA's Corporate Governance Guide (Decision No. 3/Chairman of 2020), all listed public joint stock companies are required to publish a sustainability report. Reports must be submitted to the SCA within 90 days of each financial year-end or before the annual general assembly meeting, whichever is earlier.
Both exchanges have published guidance to help listed companies shape their sustainability reports. The DFM ESG Reporting Guide 2025 sets out a defined set of 32 ESG metrics as a benchmark, while the ADX ESG Disclosure Guidance provides a framework for reporting against internationally recognised standards such as GRI (Global Reporting Initiative) and the UN Sustainable Development Goals.
3. ADGM ESG Disclosures Framework
If you’re registered in the Abu Dhabi Global Market, the ADGM ESG Disclosures Framework may apply to you. Enacted in June 2023, this framework requires ESG disclosures from ADGM companies above certain revenue thresholds on a “comply or explain” basis. Companies can choose from globally recognised standards, including GRI, ISSB, TCFD and CDP. Full details are available on the ADGM website.
4. DIFC sustainability requirements
Firms regulated by the Dubai Financial Services Authority (DFSA) in the DIFC are expected to consider ESG factors in their governance, risk management and business operations, in line with regulatory expectations and recognised global frameworks.
DMCC Pioneers of Sustainability Framework and Awards
DMCC recently launched the first edition of the Pioneers of Sustainability Awards, a new initiative recognising companies across our community that are taking meaningful steps towards environmental, social and governance (ESG) leadership.
The awards are built on the Pioneers of Sustainability Framework, co-developed with our Sustainability Hub Partners, Climate Essentials, Earthly and C3. The framework assesses 23 questions across the three ESG dimensions:
Environmental covers areas like energy consumption, waste management, water efficiency and climate strategy.
Governance and economics includes risk management, business ethics, transparency and supply chain ESG.
Social covers workforce diversity, community engagement, Emiratisation and occupational health and safety.
Each question is mapped to a UAE National Agenda priority, so the assessment reflects the local context rather than applying a generic global template. Award winners are determined by their scores across the framework, assessed by DMCC, C3, Climate Essentials and Earthly.
The inaugural awards ceremony took place on 23 February 2026, hosted as an Iftar gathering during Ramadan.
For a wider view of DMCC's own sustainability progress, the annual DMCC Sustainability Report covers performance across environmental, social and governance commitments. The 2025 edition is due later this year.
Frequently Asked Questions About ESG Reporting in the UAE
1. Is ESG reporting compulsory in the UAE?
It depends on your company type. Under Federal Decree-Law No. 11 of 2024, entities whose operations release greenhouse gases are required to measure and report emissions. Broader ESG reporting is compulsory for listed companies under SCA Decision No. (3/R.M) of 2020. ADGM companies above certain thresholds must comply or explain under the ADGM ESG Disclosures Framework. DIFC-regulated firms are expected to integrate ESG into governance and risk management.
2. What ESG reporting frameworks should UAE companies use?
There is no single mandated framework. The DFM ESG Reporting Guide recommends 32 metrics aligned with GRI, ISSB (IFRS S1 and S2) and TCFD. The ADGM framework accepts any globally recognised standard, including GRI, ISSB, TCFD and CDP.
3. How does CBAM affect UAE exporters?
The EU’s Carbon Border Adjustment Mechanism entered its definitive phase on 1 January 2026. It currently covers imports of cement, iron and steel, aluminium, fertilisers, electricity and hydrogen. UAE businesses exporting these goods to Europe must provide verified emissions data or face costs linked to EU ETS carbon prices.
4. What does the DMCC Pioneers of Sustainability Framework cover?
The framework assesses 23 questions across environmental, governance and social dimensions. It was co-developed with Climate Essentials, Earthly and C3, and every question is mapped to a UAE National Agenda priority.