Key Mandatory ESG Requirements in the UAE

1. Listed Companies (ADX & DFM)

• Under the Corporate Governance Code issued by the Securities and Commodities Authority, all listed public joint-stock companies are required to publish an annual sustainability / ESG report.
• These disclosures must cover environmental, social, and governance matters, follow GRI standards, and be filed within 90 days of financial year-end.
• The Abu Dhabi Securities Exchange (ADX) provides ESG guidance (June 2025) aligned with IFRS S1 & S2, while the Dubai Financial Market (DFM) has made ESG reporting mandatory from FY 2023 with defined ESG metrics.

2. Climate Change Reporting – All Companies

• The Federal Climate Change Law (Decree-Law No. 11 of 2024) applies to all public and private entities, including free-zone companies.
• Companies must measure and report Scope 1 and Scope 2 GHG emissions.
• Large emitters (≥500,000 tCO₂e annually) must register with the national carbon registry and face strict penalties for non-compliance.
• This requirement is overseen by the Ministry of Climate Change and Environment and directly supports the UAE Net Zero 2050 strategy.

Free Zone ESG Requirements

Abu Dhabi Global Market (ADGM)

• The Abu Dhabi Global Market has introduced a “comply or explain” ESG disclosure framework.
• ADGM companies exceeding size thresholds (turnover > USD 68 million or AUM > USD 6 billion) must publish ESG disclosures using globally recognised standards such as GRI, ISSB, TCFD, or CDP.

Dubai International Financial Centre (DIFC)

• DIFC has issued ESG and sustainability guidance, particularly for financial institutions.
• These requirements are advisory rather than mandatory, unlike ADGM.

Social Reporting – Is It Mandatory?

• The UAE does not currently mandate a standalone “social report.”
• Social disclosures (workforce, diversity, Emiratisation, health & safety) are embedded within:

a. Corporate governance rules for listed companies

b. ESG frameworks used by ADX, DFM, and ADGM

• Listed companies are required to disclose board diversity, including a minimum female representation threshold.

Government-Owned & Private Companies

• Government-related entities (GREs) are not legally required to publish ESG reports unless they are listed or regulated under ADGM.
• However, GREs are strongly expected to align with national sustainability strategies and investor expectations.
• Private companies generally face no ESG reporting mandate, except for mandatory climate emissions reporting if they cross the emission threshold.

Outlook and Practical Implication

The UAE is clearly moving toward broader and stricter ESG regulation, with regulators signalling future alignment with IFRS Sustainability Standards and increased enforcement. For listed companies, large emitters, and financial institutions, ESG reporting should now be treated as a compliance requirement, not a voluntary exercise.