In recent years, sustainability has emerged as a paramount consideration in global business practices. The UAE, with its rapid development, has not remained untouched by this global trend. In this article, we delve into the attitudes and approaches of UAE buyers towards sustainability and explore the necessity for UK manufacturers to incorporate Environmental, Social, and Governance (ESG) angles into their operations in order to stay relevant in this dynamic market.
UAE Buyers’ Attitudes Towards Sustainability
The UAE might not seem an obvious contender for sustainability discussions. However, a closer look reveals a growing consciousness among UAE buyers regarding the environmental and social impacts of their purchases. For instance, increased awareness about climate change (COP28 taking place in Dubai), resource depletion, and social responsibility has contributed to a shift in consumer mindset.
UAE buyers are increasingly valuing products and services that align with environmentally friendly practices and ethical considerations. From energy-efficient appliances to sustainably sourced materials, consumers are seeking products that reflect a commitment to reducing the environmental footprint. Supported by government initiatives, starting January 2024, a nationwide ban on single-use plastic will be implemented.
ESG in the UAE
In regard to ESG (encompassing environmental, social, and governance factors), it has become a crucial lens through which businesses are evaluated globally. To succeed in the UAE market, UK manufacturers must recognise the significance of ESG practices. Integrating sustainability into their business models not only aligns with the preferences of UAE buyers, but also positions them as responsible global players.
For instance, DEWA (Dubai Electricity and Water Authority) continues to be actively involved in promoting resource efficiency and the circular economy. Their initiatives include smart grids, energy-efficient technologies, and water conservation measures. By adopting these practices, DEWA demonstrates a commitment to sustainable procurement and responsible resource management.
Additionally, manufacturers operating in the UAE are implementing eco-friendly production processes, reducing waste, and incorporating renewable energy sources. In October 2023, entities such as EGA and Emirates NBD pioneer ESG-linked finance programme to advance sustainability in aluminium giant’s supply chain. Furthermore, Bee’ah, an environmental management company located in the country, has made notable advancements in championing sustainability. They have implemented innovative waste management solutions, such as recycling initiatives and waste-to-energy projects, effectively contributing to the mitigation of environmental impact.
Having an ESG angle provides UK manufacturers with a competitive edge in the UAE market. Companies that actively address environmental and social concerns stand out among their peers and are more likely to attract discerning consumers.
Premium on Sustainability
While UAE buyers value sustainability, they are also price conscious. The willingness to pay a premium for sustainable products varies, and manufacturers should strike a balance between offering quality sustainable products and maintaining competitive prices.
UAE consumers tend to develop brand loyalty to companies that demonstrate a long-term commitment to sustainability. This loyalty can translate into repeat business and positive word-of-mouth, contributing to a company’s overall success in the market. As an illustration, EmiratesGBC, a non-profit organization committed to advocating sustainable building practices in the UAE. Through certification programs such as the Green Building Certification (GBC), EmiratesGBC aids companies in the construction and real estate sector, enabling them to make informed decisions that support sustainable procurement and building practices.
For UK SMEs considering the region as a next destination for business engagement & opportunities, it is worth remembering that the UAE market presents a significant opportunity for UK manufacturers to embrace sustainability through ESG practices. Buyers in the UAE are increasingly attuned to the importance of environmental and social responsibility, and integrating these values into business operations is not only beneficial for the planet but also essential for establishing a strong market presence in the UAE. As consumer preferences continue to evolve, UK manufacturers can position themselves for success by aligning with the sustainability expectations of the discerning UAE market.