Green Investment In GCC Could Fuel $2 Trillion Economic Growth By 2030
Investment in green projects and sustainable finance could unlock up to $2 trillion in GDP for GCC countries by 2030, according to a recent Strategy& report. This potential can be realised if investment opportunities are harnessed across key industries.
Experts at the first conference on 'Is Investing in Sustainability Economically Viable?’ stated that investing in sustainability is not only viable but also profitable. They emphasised its potential to significantly boost the region's economy. The event, organised by Dubai Stockbrokers and Investment Services Group (DSIG) at Dubai Chambers, called for industry stakeholders to collaborate closely.
Green Finance Opportunities
The report highlights that GCC countries currently recycle only about 10 percent of plastic and metal waste. Increasing this rate to 40 percent could create approximately 50,000 new jobs and support a $6 billion market. This would significantly reduce waste and promote economic growth.
Sameera Fernandes, Chairwoman of DSIG and Chief Sustainability Officer at Century Financial, stressed the importance of green finance. "Increased investment in green projects will help double the GDP by 2030," she told seminar delegates. She urged stakeholders to work together to increase investment in sustainable projects for a pollution-free and carbon-neutral world.
Sector-Specific Benefits
The Strategy& report examined six major non-oil sectors: agriculture and food, construction, power, transport, water, and waste management. It estimated that these sectors could contribute $2 trillion to GDP by 2030 and create over 1 million jobs. The report suggests focusing on environmental sustainability, creating a green sovereign wealth fund, strengthening capital markets, and developing transparent reporting mechanisms.
For instance, restructuring supply chains in agriculture can make the sector more sustainable. Investors can expect healthy margins above 15 percent in various opportunities like recycling electrical equipment or car spare parts manufacturing.
UAE's Leadership in Sustainable Finance
The UAE has been a pioneer in sustainable finance within the GCC region. Initiatives like the Dubai and Abu Dhabi Sustainable Finance Declarations in 2019 and the UAE Sustainable Finance Framework 2021-2031 have set a national agenda for sustainable finance. Abu Dhabi's sovereign wealth fund Mubadala established an independent ESG business, while Emirates NBD raised $1.75 billion through the Gulf region's first sustainability-linked loan.
"The UAE is a pioneer in green economy," said Fernandes. "Under our wise leadership, we have undertaken numerous green projects yielding economic dividends." Projects like Masdar City aim to make the UAE a global hub for sustainability.
Global Investment Trends
Globally, an estimated $4.2 trillion per year is needed to meet UN Sustainable Development Goals (SDGs). By end-2022, global investments in sustainable assets reached $30.3 trillion with non-US markets showing 20 percent growth. The total value of sustainable investment products exceeded $7 trillion in 2023.
The financial sector plays a crucial role in promoting sustainable finance practices within the GCC region. According to the World Bank, significant progress has been made with guidelines for green bonds and sustainability reporting requirements for companies.
Sustainable Projects Across GCC
Sustainable cities powered by renewable energy are being developed across GCC nations. NEOM in Saudi Arabia and Masdar City in UAE are examples of carbon-neutral urban development projects aimed at reducing carbon footprints.
Fadi Alfaris from NZE Solutions highlighted SEE Holding’s delivery of the region's first Sustainable City – a low-carbon mixed-use project in Dubai now being replicated elsewhere. He praised UAE leadership for supporting environmentally-friendly projects that will help develop a clean world for future generations.
The DSIG operates under Dubai Chamber of Commerce alongside other Business Groups and Councils that empower companies to explore economic opportunities locally and globally.
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