Sustainability Reporting in the GCC: ESG Compliance Guide
Sustainability reporting in the GCC has moved from voluntary initiative to regulatory requirement. Governments across Bahrain, Saudi Arabia, the UAE, and other Gulf states are mandating environmental, social, and governance (ESG) disclosures for listed companies, financial institutions, and increasingly for large private enterprises. For businesses operating in the region, understanding the specific ESG reporting requirements by country is no longer optional.
This guide covers the ESG reporting landscape across GCC countries, the applicable global frameworks (GRI, SASB, TCFD), carbon reporting obligations, compliance timelines, and the assurance and audit requirements that apply.
ESG Reporting Requirements by GCC Country
Each GCC country has developed its own approach to mandatory ESG reporting, creating a patchwork of requirements that regional and multinational companies must navigate.
| Country | Regulatory Body | Mandatory ESG Reporting | Applicable To | Framework Required |
|---|---|---|---|---|
| Bahrain | Central Bank of Bahrain (CBB), Bahrain Bourse | ESG disclosure requirements effective 2025 for listed companies; CBB sustainable finance requirements for financial institutions | Listed companies, banks, insurance firms, investment firms | GRI, TCFD, CBB Sustainable Finance Framework |
| Saudi Arabia | Capital Market Authority (CMA), Saudi Exchange (Tadawul) | Mandatory ESG disclosure for listed companies from 2024; expanding to include scope 1, 2, and 3 emissions | Listed companies on Tadawul | GRI, SASB, TCFD (recommended), Saudi National Sustainability Standards |
| UAE | Securities and Commodities Authority (SCA), Abu Dhabi Securities Exchange (ADX), Dubai Financial Market (DFM) | ESG reporting mandatory for listed companies from 2024; ADX requires TCFD-aligned reporting from 2025 | Listed companies, ADX and DFM | GRI, TCFD, ADX ESG Disclosure Guidelines |
| Qatar | Qatar Financial Markets Authority (QFMA), Qatar Stock Exchange (QSE) | ESG reporting mandatory for listed companies from 2023 | Listed companies on QSE | GRI, QSE ESG Guidance |
| Kuwait | Capital Markets Authority (CMA), Boursa Kuwait | ESG disclosure encouraged from 2023, moving toward mandatory requirements | Listed companies on Boursa Kuwait | GRI, Boursa Kuwait ESG Reporting Guide |
| Oman | Capital Market Authority (CMA), Muscat Stock Exchange | ESG disclosure requirements phased in from 2024 | Listed companies on Muscat Stock Exchange | GRI |
Bahrain ESG Reporting Requirements
Bahrain has positioned itself as a regional leader in sustainable finance. The Central Bank of Bahrain has issued a comprehensive Sustainable Finance Framework that applies to all regulated financial institutions. The framework requires banks, insurance companies, and investment firms to integrate ESG factors into their governance, risk management, and disclosure practices.
Bahrain Bourse has also implemented mandatory ESG disclosure requirements for listed companies, effective from 2025. Companies must report using GRI standards and provide climate-related financial disclosures aligned with TCFD. The National Oil and Gas Authority (NOGA) has also introduced sustainability reporting requirements for energy sector entities.
The Bahrain sustainability reporting framework includes specific requirements for:
- ESG governance structures, including board-level sustainability committees
- Environmental risk assessment and management
- Social impact reporting, including workforce diversity and community investment
- Green finance product disclosure and labelling
- Climate scenario analysis for financial institutions
Saudi Arabia ESG Framework
Saudi Arabia’s ESG reporting framework is driven by the Capital Market Authority and the Saudi Exchange (Tadawul). Listed companies on the main market must publish annual ESG reports using GRI standards, with SASB and TCFD recommended for sector-specific disclosures.
The Saudi framework aligns with Vision 2030 and the Saudi Green Initiative. Key requirements include:
- Scope 1, 2, and 3 greenhouse gas emissions reporting, with verification requirements phased in from 2025
- Water consumption and management disclosures, critical for operations in the arid Kingdom
- Workforce composition by gender and nationality, reflecting Saudization objectives
- Board composition and independence, including ESG oversight structures
- Supply chain sustainability assessment
The CMA has indicated that ESG reporting requirements will extend to large unlisted companies in the medium term, bringing more of the private sector within scope.
UAE ESG Framework
The UAE has adopted a multi-regulator approach to ESG reporting. The Securities and Commodities Authority (SCA) sets the overarching framework for listed companies, while individual exchanges may impose additional requirements. The Abu Dhabi Securities Exchange (ADX) requires TCFD-aligned climate reporting from 2025.
The UAE ESG framework includes:
- Mandatory ESG reporting for all listed companies using GRI or equivalent standards
- Climate-related financial disclosures aligned with TCFD for ADX-listed entities
- Sustainable finance requirements for financial institutions under the CBUAE
- Green bond and sukuk reporting for issuers
- Alignment with UAE Net Zero 2050 strategic initiative
Global Standards: GRI, SASB, and TCFD
GCC regulators predominantly mandate or recommend global sustainability reporting frameworks. Understanding the differences between these frameworks is critical for producing compliant reports.
| Framework | Focus | Approach | Best Suited For | Adoption in GCC |
|---|---|---|---|---|
| GRI (Global Reporting Initiative) | Broad sustainability impact | Stakeholder-centric, covers economic, environmental, and social topics | General ESG reporting, most regulators require this | Mandatory in Bahrain, Saudi, UAE, Qatar, Kuwait, Oman |
| SASB (Sustainability Accounting Standards Board) | Financial materiality | Industry-specific, investor-focused | Sector-specific reporting for investors | Recommended in Saudi and UAE |
| TCFD (Task Force on Climate-Related Disclosures) | Climate financial risk | Governance, strategy, risk management, metrics and targets | Climate-specific disclosures for financial institutions | Mandatory for ADX from 2025, CBB framework |
Carbon Reporting in the GCC
Carbon reporting is becoming a standalone regulatory requirement in the GCC, separate from broader ESG disclosures. Saudi Arabia now requires verified scope 1 and 2 emissions reporting for listed companies, with scope 3 reporting on a comply-or-explain basis. The UAE is developing a national carbon reporting framework aligned with its Net Zero 2050 commitment.
Key carbon reporting requirements include:
- Emissions inventory – Complete accounting of GHG emissions across scope 1 (direct), scope 2 (energy indirect), and scope 3 (value chain indirect)
- Third-party verification – Mandatory verification of emissions data by accredited assurance providers
- Carbon offset reporting – Disclosure of any carbon credits purchased or generated
- Intensity metrics – Emissions per unit of revenue or production output for benchmarking
- Target and progress reporting – Disclosure of emissions reduction targets and progress against them
Compliance Timeline
ESG reporting requirements are being phased in across the GCC on different timelines. Companies need to understand the specific deadlines that apply to them based on their country, sector, and listing status.
| Country | Initial Reporting Year | Current Status | Upcoming Milestone |
|---|---|---|---|
| Bahrain | 2025 | First reporting cycle underway | Full CBB sustainable finance compliance 2026 |
| Saudi Arabia | 2024 | Mandatory for listed companies | Scope 3 reporting mandatory 2027 |
| UAE | 2024 | SCA and ADX compliance cycles active | Full TCFD alignment 2026 |
| Qatar | 2023 | QFMA requirements in effect | Enhanced climate reporting 2026 |
| Kuwait | 2023 (voluntary) | Voluntary to mandatory transition | Mandatory requirements expected 2027 |
| Oman | 2024 | Phase 1 for listed companies | Phase 2 expanded scope 2026 |
Assurance and Audit Requirements
The credibility of sustainability reporting depends on independent assurance. GCC regulators are increasingly requiring third-party verification of ESG data, moving from limited assurance to reasonable assurance over time.
ESG assurance requirements in the GCC currently include:
Organisations should engage with assurance providers early in the reporting cycle to ensure that data collection processes are designed to support the required level of assurance. Retrofitting audit readiness after the data is collected is significantly more expensive and often leads to qualified opinions.
Frequently Asked Questions
Which GCC country has the most advanced ESG reporting requirements?
Saudi Arabia and the UAE currently have the most comprehensive frameworks, with mandatory ESG reporting, TCFD adoption, and phased-in emissions verification requirements. Bahrain leads in sustainable finance regulation with its CBB Sustainable Finance Framework. Qatar was the earliest adopter, with mandatory reporting from 2023.
Do unlisted companies need to report ESG data in the GCC?
Currently, mandatory ESG reporting in the GCC applies primarily to listed companies and regulated financial institutions. However, Saudi Arabia and the UAE have signalled that requirements will extend to large unlisted companies. Supply chain pressure from listed companies also means that private suppliers will increasingly need to report ESG data to retain contracts.
What is the difference between GRI, SASB, and TCFD?
GRI is a broad sustainability framework covering economic, environmental, and social impacts from a stakeholder perspective. SASB focuses on financially material, industry-specific sustainability information for investors. TCFD is specifically focused on climate-related financial risks and opportunities. Most GCC regulators require GRI and recommend or mandate SASB or TCFD for specific sectors.
Is carbon offsetting recognised in GCC ESG reporting?
Yes, but the treatment of carbon offsets varies by jurisdiction. Saudi Arabia allows offset reporting as part of emissions disclosures but requires separate disclosure of offsets versus direct emissions reductions. The UAE is developing a domestic carbon credit framework under the UAE Carbon Alliance. Offsets must be verified under recognised standards such as VERRA or Gold Standard to be recognised in ESG reports.
How often must ESG reports be published in the GCC?
ESG reports must be published annually in all GCC countries with mandatory reporting requirements. The reporting cycle typically aligns with the financial year, and the report is usually published within four to six months of the financial year end. Some jurisdictions also require interim ESG updates or climate-related disclosures within the annual financial report.
What are the penalties for non-compliance with ESG reporting?
Penalties vary by jurisdiction. In Saudi Arabia, non-compliance can result in CMA sanctions including fines and suspension from trading. In Bahrain, failure to meet CBB sustainability reporting requirements can affect licensing and regulatory standing. The trend across the GCC is toward stricter enforcement, with financial penalties, public censure, and regulatory restrictions available to enforcement bodies.
Build Your ESG Reporting Capability
Sustainability reporting in the GCC is becoming a core compliance requirement. Companies that invest in robust ESG data systems, aligned reporting frameworks, and independent assurance today will be ahead of the curve as requirements expand.
Contact Bitrixme today for support with your GCC ESG reporting obligations. Message us on WhatsApp for a free consultation.
