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Driving sustainability in the Middle East

Organisations should place sustainability at the core of their strategy. (Image source: Adobe Stock)

In an exclusive interview with Oil Review Middle East, Nicolas De Gonnevile, senior manager at Bain & Company, discusses how the drive to sustainability can be accelerated 

What progress do you think MENA governments and organisations have made in sustainability, and how vigorously are they pursuing sustainability goals? 

It is crucial to acknowledge that the paradigm shift towards carbon neutrality poses a substantial challenge for countries in the region, whose economies continue to be heavily reliant on fossil fuel production. However, five GCC countries have committed to achieve net zero goals by or around mid-century: Bahrain, Kuwait, Oman, KSA and the UAE. Indicators such as net-zero goals, COP28 being hosted in Dubai, or the development of projects such as NEOM – a mega project centered on sustainability in Saudi Arabia – show governments in the region are actively signalling awareness and commitment to carbon neutrality.

Sceptics may dismiss these efforts as mere communication strategies, and indeed, image concerns may play a role. But we see so many internal initiatives by clients, such as tangible measures for energy efficiency, shifts in business portfolios towards 'low carbon' markets (investment in CCUS, blue hydrogen, renewables, etc.), and emergence of supportive policies. While not yet sufficient, the momentum is undeniably underway in the Middle East.

What practices can organisations adopt to achieve sustainability success?

The first step is to place sustainability at the core of the strategy, a trend that is increasingly prevalent today, both among major corporations (including oil & gas) and governments. This strategic pillar translates into an ambition that should be assertive yet grounded in reality. Regarding operationalisation, there is no one-size-fits-all solution; it is up to each organisation to determine what will work best given its specific circumstances. We observe a growing emergence of dedicated roles aimed at consolidating expertise and centralising accountability, sometimes at the executive level in a Chief Sustainability Officer (CSO) position. This is a viable organisational option, provided the CSO has the necessary means to act, but it is not the only one. Policymakers also play a critical role by establishing clear and supportive climate regulations, enabling access to advanced technology and infrastructure, and expanding sustainable financing solutions. Facilitating access to education and skill development for growing talent in sustainability sectors is another key factor.

How important is technology and innovation in driving sustainability, and what are the main factors for closing the sustainability innovations gap?

As low-carbon technologies are in their nascent stages, it is indeed evident that the development or optimisation of these technologies is crucial, both for the region and beyond. There exist dual challenges to be tackled. Firstly, there's the pressing race against time; the timelines for the development and maturation of these technologies are relatively rigid, as is the construction of required infrastructure. The second challenge is of an economic nature, as the return on invested capital is uncertain and long-term, which tends to limit access in an overall unfavourable macroeconomic context. Accumulated experience is imperative for these solutions to truly achieve economic competitiveness. Meanwhile, major companies investing in these technologies, particularly within the energy sector, require incentive policies and government support to enhance the currently unfavourable risk/return ratios. The region's accelerated efforts in addressing the sustainability innovation gap could strategically position it as a leader in sustainable energy technologies.

How can organisations accelerate the progress of their sustainability goals?

It is an integrated effort of the ecosystem (government, businesses, public opinion, consumers) that will accelerate progress toward sustainability goals. We all have a role to play as decision-makers, advisors, consumers, and policymakers. Initiatives like the Leaders for a Sustainable Middle East and North Africa Forum, launched by Bain and the World Economic Forum, are pivotal in this regard. They aim to boost corporate climate action through collaboration and sharing of best practices. Organisations are urged to adopt climate-friendly practices, set clear and achievable sustainability goals, raise consumer awareness, and foster partnerships with governments. This collective approach is crucial for achieving an equitable and prosperous future for the region.