{{item.videoDuration}}
{{item.title}}
{{item.text}}
{{item.videoDuration}}
{{item.title}}
{{item.text}}
Environmental sustainability is becoming the norm around the world, presenting GCC countries with an opportunity to take the lead. By changing their mindset toward sustainability and altering national policies to promote it, GCC countries can unlock more than $2 trillion in economic growth and create more than 1 million jobs by 2030.
In the past, much of the progress on sustainability came from activists or organizations such as the United Nations. Today, consumers are focused on environmental stewardship in the companies they support. Similarly, the private sector is changing, integrating sustainability concerns into its business and investment decisions.
For example, BlackRock, one of the world’s largest investment managers with over $7 trillion under management, announced that it will exit all investments with a high sustainability risk. Companies including Amazon, Microsoft, Delta Airlines, and Unilever have committed to becoming fully carbon-neutral in the next 10 to 20 years. Many oil and gas companies are planning for the transition away from carbon-based energy to renewables. BP recently increased the carbon price in its planning assumptions from $40/ton to $100/ton by 2030.
A common theme is that these companies regard sustainability as an opportunity rather than a burden. That is a significant shift in mindset—which GCC governments and state-owned enterprises can adopt. Sometimes, GCC government and corporate leaders have been wary of sustainability because of concerns that it could limit economic development.
Although some GCC governments have launched ambitious measures, particularly in renewable energy, what they need is a change in mindset and a comprehensive approach. The new attitude should be that sustainability is an opportunity for economic growth, industrial development, and innovation.
The comprehensive approach should span industries and activities. The resulting initiatives can create more than $3 trillion in value and more than 1 million jobs throughout the region by 2030. This would involve getting the most from the energy mix with a combination of low-environmental-impact hydrocarbon resources and low-cost renewable resources. Or they could use the region’s abundant renewable resources to manufacture carbon-neutral (or even carbon-negative) industrial products for export, and create future-proof jobs for the region’s citizens.
Along with such changes would be the reduction in the consumption of resources like fuel and electricity in part by reforming subsidy schemes, treating waste as a resource, and building a circular infrastructure into their megacity projects. GCC countries can manage their scarce water resources better through sustainable or zero-waste-water desalination. They should also build next-generation sustainable transport systems and integrate sustainable thinking into urban planning to improve the quality of life in cities. In agriculture they can increase food security through innovation in sustainable local farming, fisheries, and the bioeconomy, while creating market-based mechanisms for keeping environmentally significant land undeveloped for a period of time to preserve biodiversity and create eco-tourism opportunities.
These changes need government backing, which requires policy changes.
- One such change is to make sustainability an integral part of all sector strategies across government agencies and initiatives. Moreover, governments must coordinate the efforts of all ministries within a broader national framework because sustainability encompasses all sectors. Decision makers in government and state-owned enterprises should seek opportunities to increase operational efficiency, cut costs, and capture the growth created by green markets and products.
- Another policy change is to require that sustainability investments have a clear business case, based on a rigorous and robust methodology to quantify the economic, environmental, and social returns—which should apply to all government initiatives. This allows decision-makers to compare policy options across disciplines and sectors during budgeting processes and allocate scarce financial and management resources.
- The final policy change is to establish transparent, standardized, and comprehensive measurement and reporting systems to assess and report the performance of initiatives. In particular, environmental and social returns are difficult to gauge and more prone to misrepresentation than economic returns. That means systematic regulation and validation by independent third parties. Governments can only maintain the credibility of the sustainability agenda if they meet economic, environmental, and social objectives.
The transition to sustainability is happening fast. GCC governments cannot afford to be passive. Instead, by regarding sustainability as an opportunity rather than a cost, they can accelerate existing efforts and turn the GCC into a sustainability pioneer.
This article originally appeared in MEED, October 2020.
About the authors
Dr. Shihab Elborai, Salim Ghazaly, and Dr. Yahya Anouti are partners with Strategy& Middle East, part of the PwC network.
{{filterContent.facetedTitle}}
{{contentList.loadingText}}
{{contentList.loadingText}}
Contact us
Connect with us
Menu