Sheikha Shamma: ESG must remain a focal point in our organisations

Aurora50’s co-founder, Sheikha Shamma bint Sultan bin Khalifa Al Nahyan, gave this opening speech to Aurora50’s Pathway20 workshop on environmental, social and governance (ESG) in June; the accelerator readies women board directors for their first independent board role.

Three great leaders [the UAE’s three presidents, Founding Father HH Sheikh Zayed bin Sultan Al Nahyan, HH Sheikh Khalifa bin Zayed and HH Sheikh Mohamed bin Zayed Al Nahyan] have contributed significantly to this nation. They put sustainability, the people who live on this land, and our economy at the heart of decision-making.

And I’m immensely grateful for the exponential development that our nation has experienced as a result.

Today marks the day when our flag is raised once again. After 40 days of mourning, and honoring my grandfather, HH Sheikh Khalifa bin Zayed Al Nahyan, may his soul rest in peace.

Sheikh Khalifa dedicated his entire life to service and played an instrumental role in our energy transition and diversification strategy.

Environmental, social and governance criteria – ESG – is a topic that’s very close to my heart: one of the reasons why I established Alliances for Global Sustainability, and co-founded Aurora50 was to drive change in line with the United Nations’ sustainable development goals (SDGs).

I have learned that sustainability is a journey. Once you’re on it, you will keep challenging yourself to improve.

For any business this journey starts with having the right sets of data – data which goes beyond financial reporting.

Businesses can no longer be assessed solely on their financial performance. Without proper governance and environmental considerations, there is no business.

In fact, it’s estimated that the impact of climate change could cost businesses up to $1.3 trillion by 2026.

Furthermore, the World Economic Forum’s Global Risk Report this year stated that environmental factors such as climate action failure, extreme weapon and biodiversity loss are three of the top risks by severity for the next decade.

All of these factors affect the global economy. According to research by S&P500, 80 percent of the world’s largest corporations are reporting exposure to physical or market transition risks associated to climate change.

This may seem overwhelming, but ESG frameworks such as those used by Global Reporting Intitative (GRI) Standards and the Sustainability Accounting Standards Board (SASB) provide structure and focus on addressing the major challenges related to industry.

When it comes to governance and, more specifically, diversity and inclusion (DEI), businesses are facing heightened invested scrutiny – and not just at board level.

This has resulted in better governance, financial performance and national competitiveness.

However, there is one aspect that businesses must be wary of: amongst some of the biggest risks is being caught up in the practice of greenwashing, that is – appearing to be environmentally conscious for marketing purposes.

Every initiative should be rooted in a clear purpose and have the data to substantiate its progress.

Not doing so can pose a massive reputational risk to the business and does not ultimately mitigate the environmental risks that are challenging them.

Awareness and knowledge of ESG is incredibly important, but it is only by breaking silos, by co-operating at a governmental and industry level, that it can trickle down to organisations in a way that promotes sustainability.

With COP28 being hosted in the UAE next year, we all need to ensure that ESG remains a focal point in our organisations.

We need to catalyse transformative change at a systemic level, which will require significant effort from all industries and businesses.

So let’s choose to take the road that leads to a more resilient future. Let’s accelerate our green transition through ESG, and together we can create change.