- cirececo2
- Dec 1, 2024
- 5 min read
As the world faces the urgent realities of climate change, businesses are increasingly at the forefront of driving environmental solutions. The recently concluded COP29 emphasized the importance of collaborative actions to achieve global climate goals, with a strong focus on nature-based solutions, climate finance, and green entrepreneurship. For businesses in Saudi Arabia (KSA), these discussions resonate deeply with Vision 2030’s commitment to sustainability and the Kingdom's ambitious Nationally Determined Contributions (NDCs). This article explores how businesses can curate strategic actions to deliver measurable environmental impact, drawing insights from COP29 and aligning with KSA's environmental priorities.
1. Understanding the Landscape: The KSA Perspective
Saudi Arabia’s commitment to environmental sustainability has grown remarkably under Vision 2030. Key initiatives, such as the Saudi Green Initiative (SGI) and Middle East Green Initiative (MGI), aim to plant billions of trees, reduce carbon emissions, and foster renewable energy adoption. However, beyond government-led initiatives, businesses have a critical role to play. As SMEs and large corporations contribute significantly to the economy, their active engagement in sustainable practices is pivotal to achieving the country's goals.
COP29 Takeaways: Guiding Strategic Actions for Businesses
At COP29, three key themes emerged that can guide businesses in designing their sustainability strategies:
1. Nature-Based Solutions (NBS)
These emphasize restoring ecosystems to address climate challenges. Businesses can integrate NBS by supporting afforestation, mangrove restoration, and sustainable agricultural practices. For example, partnerships with the Saudi Green Initiative could amplify local impact. COP29 underscored the importance of NBS in mitigating climate impacts. Nature-based projects play a vital role in mitigating climate change and biodiversity loss. According to estimates, nature-based solutions can provide 37% of the mitigation needed until 2030 to achieve the Paris Agreement targets[1].
The Red Sea Global (RSG) initiative focuses on large-scale coral reef restoration along the Red Sea coast, aiming to plant over 50 million mangroves and establish one of the world’s largest reef restoration programs. This aligns with the Saudi Green Initiative's goals to enhance biodiversity and combat climate change[2].
2. Climate Finance
Mobilizing private sector capital for sustainability projects is essential. To reach net zero emissions by 2050, annual clean energy investment worldwide will need to more than triple by 2030 to around $4 trillion[3]. Saudi businesses can invest in renewable energy projects, carbon capture technologies, and water management solutions, capitalizing on government incentives for green initiatives. At COP29, the spotlight was on private sector investments, with Saudi Arabia emphasizing green financing models and Public-Private Partnerships (PPPs) to support renewable energy and circular economy projects.
The Public Investment Fund (PIF) of Saudi Arabia launched the Green Finance Framework to issue green bonds. They allocated $5.2 billion out of $8.5 billion through these green bonds to fund renewable energy and sustainable water projects, including solar and wind farms in NEOM and the Red Sea Project[4].
3. Green Entrepreneurship
COP29 highlighted the importance of empowering startups and SMEs to innovate solutions for decarbonization and circular economy practices. SMEs were identified as vital contributors to achieving decarbonization goals. In Saudi Arabia, 97% of businesses are SMEs, representing a significant opportunity to integrate green practices and innovate sustainable solutions[5].
Monsha’at, Saudi Arabia’s General Authority for Small and Medium Enterprises, is driving the Kingdom’s economic diversification by fostering SME growth and entrepreneurship. As of 2023, SMEs in the Kingdom reached 1.3 million, supported by public investment and leading venture capital initiatives. Key programs include financing partnerships, e-commerce development, and university entrepreneurship initiatives, aiming to increase SME contributions to 35% of GDP by 2030[6].
Strategic Actions for Tangible Environmental Impact
To drive meaningful change, businesses must focus on measurable and impactful strategies. Here’s how:
1. Invest in Renewable Energy
Adopt renewable energy solutions to reduce operational carbon footprints. Projects like Sakaka Solar Plant, generating 300 MW, demonstrate the scalability of clean energy initiatives in KSA. The Kingdom aims to generate 50% of its energy from renewables by 2030, with projects like NEOM and the Red Sea Wind Project leading the way.
2. Support Circular Economy Initiatives
The circular economy could create more than 7 million jobs and unlock up to $4.5 trillion in economic growth by 2030[7]. Shift from a linear model to a circular approach by prioritizing waste reduction, resource efficiency, and product lifecycle management. Saudi businesses can contribute by reducing waste and reusing materials, aligning with the goals of MWAN (National Center for Waste Management).
Saudi Aramco’s Circular Carbon Economy initiative is based on effective waste management including oil and gas operations waste. They are fostering strategic partnership with other companies for waste recycling. These three companies including Aramco, Total Energies and Sabic successfully converted plastic waste into ISCC+ certified circular polymers[8].
3. Commit to Science-Based Targets
Businesses can reduce their Scope 1, 2, and 3 emissions to stay competitive in an increasingly carbon-conscious market. Participation in programs like the Science Based Targets initiative (SBTi) can enhance credibility and transparency. KSA has committed to achieving net-zero emissions by 2060, with intermediate milestones aligned with global climate targets[9]. Businesses need to follow this decarbonization commitment and should adopt measurable, science-backed goals to reduce emissions in line with the Paris Agreement. In the Middle East, companies setting targets as per SBTi increased from 2 to 11 comparing data of 2022 and 2023 which is around 450% increase[10].
4.Strengthen Water Stewardship
Given the limitations on natural water resources in Saudi Arabia, businesses can play a significant role by implementing water conservation technologies and supporting community water access programs. MEWA plans to meet 90 percent of Saudi Arabia water demand using desalinated water and 10 percent using ground and surface water by 2030[11].
5. Leverage Technology and Innovation
Harness technologies like AI and IoT for real-time environmental monitoring and optimization. For example, using data analytics to measure carbon footprints can lead to actionable insights and efficiency improvements.
6. Align with Global and Local Standards
Ensure sustainability reporting adheres to frameworks like GRI, IFRS S2, or CSRD, and align with local policies under Saudi Vision 2030. Transparent reporting builds trust and encourages accountability. As per the survey by PWC, two-thirds of companies in the Middle East now produce sustainability reports[12].
The Role of Leadership and Collaboration
Driving environmental impact requires bold leadership and cross-sector collaboration. Saudi Arabia's strides in renewable energy through projects like NEOM’s clean energy initiatives demonstrate the transformative power of aligning business strategies with national goals. Corporate leaders must foster a culture of innovation, engage stakeholders in decision-making, and empower teams with the tools to implement sustainable practices. Partnerships with NGOs, academic institutions, and international organizations can further enhance impact and scalability.
The Way Forward: Driving Collective Impact
The journey to sustainability is both a challenge and an opportunity for businesses. By curating strategic actions and aligning with global trends and national priorities, Saudi businesses can make a profound environmental impact. As COP29 highlighted, collaboration and innovation are critical to building a sustainable future.
In the KSA context, curating strategic actions that align with national priorities and global best practices can position businesses as agents of meaningful environmental change. By embracing innovation, collaboration, and a clear commitment to measurable goals, businesses can transform their operations into catalysts for sustainability—driving tangible environmental impact while contributing to a resilient and prosperous future for all.
What steps is your organization taking to make a difference? Let’s drive the conversation forward and inspire change together.
[2] Saudi Green Initiative 2023 Report
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