How can Saudi companies contribute to vision 2030 by aligning with SDG goals

One of the biggest goals of Saudi Arabia and its vision of 2030 is reaching economic diversification and limiting its reliance on oil while meeting the Paris Agreement’s climate targets.

Saudi Arabia has set a group of targets that includes: a transition to green energy, achievement of sustainability goals, and incorporation of ESG in its investments.

For Saudi Arabia to reach its ambitions and net zero emissions by 2060, Saudi Exchange has committed to encouraging ESG disclosure across the financial ecosystem. This means companies are invited to incorporate ESG practices, yet not obligatory. Still, companies who hastened to embark on the ESG journey not only help Vision 2030 and support the global commitment to achieve the Sustainable Development Goals, but attract longer-term investors, including major institutional investors, -as analysis of relevant ESG factors has become a fundamental part of assessing the value of an investment-, the company is more knowledgeable of stakeholder needs, and foster collaboration with them, and differentiate itself from its competitors on ESG and improve its branding. Furthermore, the integration of SDGs in business plans strengthens the identification and management of material risks and costs and opens opportunities to new markets.

The exercise can start with companies identifying what are already doing in terms of sustainable development and corporate responsibility, and then determining what ESG metrics that are crucial for the business and finishing by filling the gaps that the company needs to address.

The other exercise that companies can focus on is how to apply their skills and capabilities to develop products, services, or investments that contribute to the achievement of the SDGs, which can be fulfilled by identifying SDG targets that companies can best contribute to through beneficial products and services.

By adopting the two exercises, companies will be monitoring and mitigating their risks, at the same time looking for ways to create value and innovate in business models sustainably.

To spearhead the company toward an increasingly robust approach to ESG, the board plays a primordial role. And because the board holds the power to mandate and guide the business focus, the board plays a decisive role in translating ESG into strategies and has the ultimate responsibility for corporate performance and reporting, including ESG disclosures aligned with best practices and demonstrating strong ESG credentials, giving board members a spur to prioritize ESG management and measurement.

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