ESG reporting in the UAE is becoming part of normal business management. Listed companies already face annual sustainability disclosure requirements. Certain large businesses in Abu Dhabi Global Market must report under a comply-or-explain framework. Companies whose activities release greenhouse gases also need to understand the UAE’s federal climate law.
ESG stands for Environmental, Social, and Governance. An ESG report is an official document published by a company to share data about its carbon footprint, worker safety, fair pay, and leadership rules.
Even where a full public report is not compulsory, banks, investors and major customers may request environmental, workforce and governance data.
Your first task is not designing a glossy report. Identify the rules that apply, assign responsibility and make sure each figure can be traced to reliable evidence.
Your licence, legal structure and jurisdiction can affect which authorities oversee the business. New founders may find it useful to review Nexture’s Dubai company setup guide and its comparison of Dubai mainland and free zone companies.
Is ESG Reporting Mandatory in the UAE?
There is no single reporting rule that applies in the same way to every UAE business. Your obligations depend on where the company is registered, whether it is listed, its regulated activity and the environmental impact of its operations.
ADX and DFM-listed companies: Companies listed on Abu Dhabi Securities Exchange and Dubai Financial Market face annual sustainability disclosure requirements under the Securities and Commodities Authority’s governance framework. The ADX ESG Disclosure Guidance aligns with IFRS S1, IFRS S2 and GRI. DFM also provides an official ESG and sustainability reporting guide.
Certain ADGM entities: ADGM’s comply-or-explain framework covers companies with annual turnover above US$68 million and FSRA-authorised fund or asset managers with more than US$6 billion under management. Qualifying entities generally file with their annual accounts, usually from the third year after incorporation. ADGM accepts standards such as GRI, ISSB, TCFD and CDP.
Businesses that emit greenhouse gases: Federal Decree-Law No. 11 of 2024 took effect on 30 May 2025. It covers public and private legal persons and individual establishments whose activities release greenhouse gases, including free-zone businesses. Covered entities must measure emissions, maintain an inventory and submit periodic reports under standards set by competent authorities. The adjustment period ended on 30 May 2026, so confirm the current process with your regulator or the Ministry of Climate Change and Environment. Read the official UAE climate law.
Banks, insurers and financial firms: Financial institutions may also face sector-specific sustainability and climate-risk expectations. The UAE Sustainable Finance Working Group has issued principles covering governance, strategy, risk management, materiality and product-level disclosure.
A small private company is not automatically required to publish a complete ESG report simply because it operates in the UAE. However, climate reporting duties may still apply if its operations release greenhouse gases. Contractual requests from banks, customers or parent companies can also create a practical reporting requirement.
This article provides general information. Your company should confirm its exact obligations with the relevant regulator or qualified adviser.
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What Does an ESG Report Cover?
A useful report explains how your business manages environmental, social and governance issues. It should include measurable results, policies, risks and future targets.
Environmental
Common environmental disclosures include:
Electricity and fuel consumption
Scope 1 and Scope 2 greenhouse gas emissions
Material Scope 3 emissions
Water use
Waste generated, recycled and disposed
Pollution controls
Climate-related physical and transition risks
Environmental targets and progress
Social
Social reporting often covers:
Workforce size and turnover
Health and safety incidents
Employee training
Diversity and equal opportunity
Labour practices and worker welfare
Emiratisation data where applicable
Customer health, safety and privacy
Community programmes
Governance
Governance disclosures may include:
Board oversight of ESG issues
Business ethics and anti-bribery controls
Whistleblowing procedures
Regulatory compliance
Data protection
Risk management
Internal controls
Executive accountability for sustainability targets
Focus on issues that are genuinely significant. A logistics operator may prioritise fuel use and road safety, while a professional services firm may focus on data privacy, staff retention and ethics.
Which ESG Reporting Framework Should You Use?
The best framework depends on who will read the report and what decisions they will make.
GRI Standards: GRI focuses on a company’s impacts on the economy, environment and people. It works well for broad stakeholder reporting and helps businesses identify material topics. You can access the official GRI Standards.
IFRS S1: This standard covers sustainability-related risks and opportunities that could affect cash flows, access to finance or the cost of capital. It organises disclosure around governance, strategy, risk management, metrics and targets. See the official IFRS S1 standard.
IFRS S2: IFRS S2 applies the same structure to climate-related risks and opportunities. It covers physical risks, transition risks, emissions and climate targets. The official IFRS S2 page provides the standard and supporting material.
GHG Protocol: Use the GHG Protocol to calculate and classify Scope 1, Scope 2 and Scope 3 emissions. IFRS S2 also refers companies to the GHG Protocol for greenhouse gas measurement, subject to specified reliefs and jurisdictional requirements.
Many UAE businesses use GRI for impact reporting, IFRS S1 and S2 for investor-focused information and the GHG Protocol for emissions. Provide a clear index and explain any omitted disclosures.
How to Prepare an ESG Report in the UAE
- Confirm Your Reporting Scope
Start with the company’s legal form, licence, activities, branches and regulated status. Check whether the business is listed, registered in ADGM, supervised by a financial regulator or covered by the federal climate law.
Your corporate structure also affects the reporting boundary. Review Nexture’s guide to LLP versus LLC structures in the UAE and its explanation of a limited liability company in Dubai if you need to confirm how entities and ownership are organised.
- Assign Clear Responsibility
Appoint a board or senior-management sponsor. Then name one person to coordinate the report. Finance, HR, operations, legal, procurement and facilities teams should each own the data they produce.
Record each metric, data owner, reviewer, source document and deadline.
- Set the Reporting Boundary and Period
Decide which subsidiaries, offices, warehouses and operating sites are included. Use the same reporting period as your financial statements where practical.
Explain exclusions and state when omitted entities will enter the boundary.
- Identify Material Topics
Speak with the people who use or affect the business. This may include investors, employees, customers, suppliers, regulators and local communities.
Rank issues by their operational, financial, legal and reputational significance. Retain the scoring method and meeting records.
- Build an ESG Data Register
For every metric, record:
Definition and unit
Reporting frequency
Data owner
Source system or document
Calculation method
Evidence retained
Reviewer and approval status
Match electricity to utility bills, fuel to invoices, safety data to incident logs and workforce figures to HR records.
- Calculate a Baseline
Choose a consistent baseline year. Report absolute figures and useful intensity measures, such as tonnes of carbon dioxide equivalent per unit produced.
Separate Scope 1, Scope 2 and relevant Scope 3 emissions. Mark estimates clearly and document emission factors, assumptions and restatements.
- Set Specific Targets
A target needs a baseline, deadline, owner and measurement method. “Reduce electricity intensity by 10% by the end of 2028 against a 2026 baseline” is more useful than “become greener.”
Match targets to operational plans and budgets. Avoid net-zero claims without an emissions inventory, reduction pathway and treatment for residual emissions.
- Draft a Balanced Report
Include both progress and gaps. Readers should be able to see:
The reporting boundary
Frameworks used
Material topics
Policies and governance
Current-year data
Previous-year comparisons
Targets and progress
Calculation methods
Restatements and limitations
ADX guidance allows sustainability information to appear in the annual report, a standalone sustainability report or an integrated report. Whichever format you choose, identify the reporting framework and keep the data consistent with corporate filings.
- Review and Consider Assurance
Ask finance, legal, internal audit and senior management to review the draft. Test high-risk figures against source evidence.
External assurance is not universal, but limited assurance can strengthen confidence in emissions and other priority indicators.
A Practical 90-Day ESG Readiness Plan
A full report may take longer than three months, but a 90-day plan can create a reliable starting point.
Days 1 to 30: Confirm applicable rules, select the reporting framework, appoint the sponsor and ESG coordinator and define the reporting boundary.
Days 31 to 60: Complete a materiality assessment, build the data register and collect at least 12 months of available environmental, workforce and governance records.
Days 61 to 90: Calculate the baseline, identify data gaps, prepare a management KPI pack and approve a reporting calendar. Assign corrective actions to weak data areas before drafting the public report.
We’ll model the requirements and send back a single-page breakdown within 24 hours.
Common ESG Reporting Mistakes
Avoid these frequent problems:
Copying another company’s material topics
Publishing percentages without absolute figures
Changing boundaries without explaining the change
Mixing estimates and measured data
Making broad environmental claims without evidence
Omitting missed targets
Using different figures in the ESG report and annual accounts
Treating the report as a marketing document
Collecting data once a year instead of building routine controls
A credible report can contain gaps. Explain what is missing, why and what you will do next.
Conclusion
ESG reporting in the UAE is moving toward clearer, more structured disclosure. The practical response is to start with applicability, reliable data and accountable owners. Choose recognised standards, explain your methods and report weaknesses honestly.
Frequently Asked Questions
Is ESG reporting compulsory for every UAE company?
No. Requirements vary by listing status, jurisdiction, regulated activity and emissions profile. Listed companies and qualifying ADGM entities face specific disclosure frameworks. Businesses that release greenhouse gases also need to assess their duties under the federal climate law.
How Often Should a UAE Business Publish an ESG Report?
Annual reporting is common and is required in several regulated settings. Climate-law reporting is periodic, with the detailed process set by the competent authorities. Internally, many companies track priority indicators monthly or quarterly.
Do UAE SMEs Need to Report Scope 3 Emissions?
It depends on the applicable framework and the expectations of customers, investors or regulators. IFRS S2 covers Scope 3 greenhouse gas emissions, but a smaller business should first identify material categories and confirm whether any reporting relief or local rule applies.
Can a Company Prepare Its First Report Without External Assurance?
In many cases, yes. External assurance is not a universal requirement. You should still complete a structured internal review and retain evidence for every material figure. Assurance is worth considering for emissions and other high-risk metrics.
What Is the Biggest First-Year Challenge?
Data quality is usually harder than writing. A clear register and named owners make the next reporting cycle easier.
