Bain: How MENA Companies can Become Sustainability Leaders

There is a clear disconnect between stated intentions and meaningful action when it comes to sustainability in the Middle East and North Africa (MENA).

That’s according to research from Bain & Co that suggests 70% of organisations in the region have set clear targets, but only 3% are on track to achieve those goals.

The report, released in Dubai at the World Governments Summit, identified many areas where companies in MENA need to improve significantly, and backs up UN stats that only 15% of Sustainable Development Goals (SDGs) globally are on track, and many are falling further behind.

While the hosting of COP27 and COP28 in the region helped boost the profile of sustainability issues, there is a real and urgent need for diversification of economies, and closing of gender gaps.

Bain highlights that while the environmental, social, and governance (ESG) challenges are huge, so are the opportunities.

That’s because two thirds of investors consider sustainability when making decisions, and consumers are also demanding sustainability credentials. Some 85% of consumers are spending in a more sustainable manner.

So what’s going wrong?

Based on Bain’s research, 90% of organisations say they need to change their operating models to address sustainability.

Four Reasons Why MENA Companies are Lagging on ESG

Bain suggests the following four reasons why companies in MENA are seriously lagging:

1. Perception: Sustainability is viewed through a risk management lens, rather than being seen as a strategic or value-creating opportunity.
2. Silos: Sustainability goals and responsibilities are separate from the operational sides of the business.
3. Disconnects during goal setting: Sustainability ambitions are set at the top and fail to translate into actions.
4. Excessive caution: Organisations are naturally risk averse so don’t explore or invest in sustainable solutions.

Not dwelling on the negatives, Bain also suggests four steps that organisations can take to make a difference – something it calls the L-E-A-D approach:

1. Link sustainability ambitions to corporate strategies
2. Engage cross-functional teams
3. Activate achievable sustainability missions
4. Drive innovation and rapidly scale sustainable business solutions

In the MENA region especially, Bain says organisations need to take this LEAD to take full advantage of the many ESG opportunities, transform their corporate cultures, and benefit both shareholders and wider society.

Read the report here