Economic Growth and Diversification

Economic Growth and Diversification

The changing business environment and a drive for sustainable growth

How the UAE’s green growth trajectory has changed the business landscape

During the last United Nations Conference on Sustainable Development, better known as Rio+20, a host of countries, including the United Arab Emirates, took a pledge to transform growth strategies to advance green economy and sustainable development. The representatives of 190 states univocally agreed that a green economy transition presents a crucial pathway to sustainable development and poverty eradication. The launch of the Sustainable Development Goals in September 2014 is a milestone for all of humanity, and is expected to accelerate the drive for sustainable development across the world. For the UAE, green development is not a new priority; it was embedded in the visions of its founding fathers as early as the 1970s. Environmental responsibility has always been a mantra driving nation building policies. Quite naturally, business, particularly the public sector, adopted green practices from early on. The push for the private sector came even as the country’s leadership prepared to launch national strategies and plans of action to facilitate the transition. Several organisations came to the fore, in particular those in key national sectors like Energy, Water, Oil& Gas, Logistics, etc. Focus shifted to opportunities latent in green services, green technologies, innovation, emission reduction, and so on.

Companies turn to CSR and Sustainability to address the Triple Bottom Line

A noticeable trend in the Region as a whole is that businesses began to adopt CSR and Sustainability, either on ethical grounds, or to add value to their business. A long term societal focus has historically characterized businesses in the Region and in the UAE, erupting from religious and cultural ethos.  The shift came when businesses began to apply international standards as benchmarks of performance in Quality, Environment, Health & Safety and Human Rights. The progression to ethical and operational good practice happened without much external push. Unlike many instances in western economies, it came from within, backed by national visions, strategies and agendas of sustainable development. More and more, triple bottom line issues influenced management decisions, were translated into business practices and cascaded down across multiple functions. Stakeholder conversations triggered the need to introspect and analyse the organisation’s impacts going beyond economic contribution, and focusing on social, cultural and ecological impacts. The spotlight also turned to concepts like ‘shared value creation’ and ‘social value creation’ whereby the organisation protects, nurtures and enhances not only the economic value of its business, but seeks to create and preserve value for the society as well. This was considered good business sense as organisations clearly began to understand the reputational value of doing good, the efficiencies gained through environmental management, the loyalty accrued through labour welfare, the risks averted through supply chain engagement in sustainability, and the bottom line implications of all the factors. However the challenge lay in integrating sustainability and green economy principles into the business strategy, apportioning adequate investments and de-centralising implementation. Some organisations mastered the trick of doing it, others tried various permutations and combinations to reach to the right equation.

Re-thinking goods and services, and edging close to Innovation

As organisations internalized CSR and sustainability, they also began to display an inclination to take up greater responsibility for the goods and services they produced. Attention was given not only to what was being produced, but how it was being manufactured, where it would end up, and what would be the impact after the use or expiration. The quest for improved goods and services, better processes and ethical practices was necessitated also by the fact that the UAE was unquestionably emerging as a global player and was focused on raising its position in competitive markets internationally. Companies were gradually moving closer to innovation and re-inventing business objectives as they increasingly viewed themselves as game changers in a new landscape of opportunity. Opportunities linked to CSR and sustainability opened the door to R&D, new technologies, and innovative products and services. Within this scenario, the Region found itself in the throes of economic recession, political crisis and social disruption. What was remarkable was that those leaders and early practitioners of green economy and sustainability remained steadfast in their commitments, and continued to thrive in an otherwise difficult environment. As the UAE formalized its approach towards Green Economy and Sustainable Development through the Vision 2021, Green Growth Agenda and Green Economy Initiative, these organisations are already riding the wave of transformation. They are crafting exemplary cases of sustainable value creation and changing the business landscape by catalyzing a new paradigm of growth and development.

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