Mandatory Sustainability Reporting in the Middle East
ISSB Standards and Climate Disclosure
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Table of Contents
- What are the ISSB standards?
- Who is required to report?
- What are the assurance requirements?
- What to include in the Sustainability Report?
- How Anthesis can help
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The Middle East is joining other global markets in driving greater transparency on climate risks and opportunities by introducing mandatory sustainability and climate reporting aligned with the International Sustainability Standards Board (ISSB). These requirements are being phased in across jurisdictions such as the UAE, Oman, Jordan, Qatar, and Kuwait, while Saudi Arabia and Bahrain are encouraging adoption through regulatory guidance.
This signals a clear shift from voluntary ESG disclosures toward regulated, investor-grade climate reporting, aligning corporate practices with global standards and strengthening market resilience. Whether your organisation operates in a jurisdiction with mandatory timelines, or is voluntarily aligning to meet investor and supply chain expectations, the ISSB standards will likely affect you.
This article answers the most common questions on how to prepare for mandatory climate reporting in the Middle East, helping you understand the requirements and take your next steps toward ISSB-aligned disclosures.
What are the ISSB standards for climate and sustainability reporting?
In 2023, the ISSB, established by the IFRS Foundation, published two sustainability disclosure standards to create a global baseline for transparent and comparable sustainability reporting:
- IFRS S1 – General Requirements: Sustainability-related disclosures covering governance, strategy, risk management, and metrics/targets.
- IFRS S2 – Climate-related Disclosures: Specific requirements for climate risk and opportunity disclosures, building on the Task Force on Climate-related Financial Disclosures (TCFD).
The four core disclosure areas remain:
- Governance – Board and management oversight of sustainability risks and opportunities.
- Strategy – How climate and sustainability considerations affect business models and financial planning.
- Risk Management – How risks are identified, assessed, and managed.
- Metrics and Targets – GHG emissions disclosure (Scopes 1, 2, and 3) and progress against sustainability performance goals.
Several Middle Eastern regulators are moving to adopt or align with these standards, reflecting a wider global push for consistent, decision-useful disclosures.
Who is required to report?
United Arab Emirates (UAE)
From May 2025, companies subject to Federal Decree-Law No. 11 must disclose climate-related risks and Scope 1–3 GHG emissions. Non-compliance carries penalties ranging from AED 50,000 to AED 2 million.
Oman
The Muscat Stock Exchange requires listed companies to publish ESG reports aligned with GRI and GCC metrics starting January 2025.
Jordan
The Amman Stock Exchange has mandated ISSB-aligned climate disclosures (IFRS S2) for its top 20 listed companies beginning January 2027, with fines for non-compliance.
Qatar
The Qatar Financial Centre has proposed ISSB-aligned reporting beginning January 2026, with phased guidance and transitional relief.
Kuwait
Premier Market-listed companies must disclose ESG information for FY2025, with the first reports due in June 2026.
Bahrain
The Central Bank of Bahrain requires banks to report in line with TCFD and ISSB guidance, though broader adoption remains voluntary.
Saudi Arabia
The Capital Market Authority and Tadawul encourage ESG disclosures, guided by Vision 2030. While not yet mandatory, alignment with ISSB and TCFD is strongly expected in the coming years.
Are there penalties for non-compliance?
Penalties vary by jurisdiction:
- UAE: Monetary fines for incomplete or inaccurate reporting.
- Jordan: Financial penalties for listed firms that fail to comply.
- Other GCC countries: Enforcement mechanisms are still being developed, but reputational risks, investor pressure, and reduced access to capital remain strong motivators for compliance.
What are the assurance requirements?
- UAE and Oman: Independent assurance of climate data is increasingly encouraged, particularly for Scope 1 and 2 emissions.
- Jordan and Qatar: External assurance requirements are expected as reporting frameworks mature.
- Regional trend: Limited assurance over Scope 1 and 2 GHG emissions is likely to become mandatory across GCC countries by the late 2020s.
Why is the Middle East implementing sustainability reporting?
The move reflects national strategies to diversify economies, attract foreign investment, and align with global climate commitments. Examples include:
- UAE Net Zero 2050 Strategy
- Saudi Arabia’s Vision 2030
- Oman Vision 2040
- Qatar National Environment and Climate Change Strategy
Mandatory sustainability reporting strengthens accountability, improves investor confidence, and accelerates the region’s transition toward a low-carbon economy.
What to include in the Sustainability Report
Companies will need to prepare annual sustainability reports structured around ISSB and TCFD pillars:
- Governance: Board oversight, management responsibilities, and integration into corporate governance.
- Strategy: Business resilience under climate scenarios, transition planning, and long-term financial implications.
- Risk Management: Processes for identifying and mitigating sustainability-related risks.
- Metrics and Targets:
- Scope 1 and 2 emissions (mandatory across most jurisdictions)
- Scope 3 emissions (phased in, especially for large or listed firms)
- Industry-specific indicators (aligned with SASB metrics)
- Climate targets and transition progress
Preparing for compliance with ISSB-aligned reporting
- Conduct a gap analysis against ISSB (IFRS S1/S2) requirements.
- Strengthen data systems to capture and verify GHG emissions, including Scope 3.
- Enhance governance capacity, ensuring board and executive accountability.
- Build cross-functional teams across finance, sustainability, and risk.
- Pilot scenario analysis to understand climate risks and resilience.
- Seek expert guidance and assurance to build credibility and readiness.
Benefits of ISSB-aligned reporting in the Middle East
- Global credibility: Alignment with international standards improves competitiveness and market access.
- Investor transparency: Provides decision-useful disclosures that attract capital and partnerships.
- Risk management: Embeds climate considerations into strategic planning.
- Operational efficiency: Improves data management and reporting processes.
- Stakeholder trust: Demonstrates accountability to regulators, customers, and communities.
Need support with climate or sustainability reporting in the Middle East?
As global climate and ESG experts, Anthesis supports organisations across the Middle East in preparing for ISSB-aligned disclosures. From gap analysis and data readiness to assurance and strategy, we help companies meet regulatory requirements, enhance resilience, and unlock opportunities in a low-carbon economy.
We are the world’s leading purpose driven, digitally enabled, science-based activator. And always welcome inquiries and partnerships to drive positive change together.
