How ESG Helps UAE Companies Attract Investors
Learn how credible ESG strategy, reporting and assurance can improve investor confidence and access to sustainable finance in the UAE.
August 20, 2026
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I-REC certificates allow UAE companies to prove that the environmental attributes of a specified quantity of electricity have been allocated to them through a recognised registry. One I-REC for Electricity, or I-REC(E), represents the attributes of one megawatt-hour of electricity generated from a renewable source. To make a credible claim, a business should match certificates to its electricity consumption, confirm the generation source, geography and production period, redeem the certificates for the correct beneficiary and retain the redemption statement.
I-RECs do not prove that particular electrons travelled directly from a renewable plant to the company’s facility; they provide traceable ownership of the associated renewable electricity attributes.
An I-REC(E) is an Energy Attribute Certificate issued under the I-TRACK Foundation’s accredited electricity Product Code. Each certificate carries information about one MWh of electricity generation, including attributes such as the production facility, energy source, generation location and production period.
Electricity from different sources becomes physically mixed after entering a shared grid. A business cannot normally trace the individual electrons delivered to its office, warehouse or factory back to one specific solar plant. An attribute-tracking system instead records who owns the environmental attributes associated with particular units of generation. The Abu Dhabi Department of Energy explains that its registry records the full lifecycle of certificates and helps prevent the same attributes from being claimed more than once.
| Area | Electricity supply | I-REC certificate |
| What is purchased | Physical electricity supplied through the grid | Environmental attributes associated with a specified unit of generation |
| Measurement | Usually kWh or MWh shown on utility records | One certificate per MWh |
| Evidence | Utility bill or meter record | Registry transaction and redemption statement |
| Purpose | Operate the company’s facilities | Support a renewable electricity claim |
| Carbon reporting role | Establish electricity consumption | May support market-based Scope 2 accounting when applicable criteria are met |
An I-REC purchase does not replace the electricity bill. The company needs both records: the utility information establishes how much electricity it consumed, while the certificate establishes ownership and redemption of the corresponding energy attributes.
The I-TRACK Foundation currently identifies the Abu Dhabi Department of Energy as the approved I-REC(E) issuer for Abu Dhabi and the UAE. Within the Abu Dhabi Clean Energy Certificate scheme, the DoE is the formally authorised issuer, and the I-REC registry records certificate issuance, ownership transfers and use.
The basic certificate lifecycle involves four stages:
The I-REC(E) Product Code establishes the processes for issuance, transfer and redemption. The accredited registry acts as the record of legal certificate ownership.
UAE businesses should read the generation technology shown on the certificate carefully.
Abu Dhabi’s Clean Energy Certificate scheme can include electricity generated from sources such as solar and nuclear energy. A company wishing to claim specifically that it purchased renewable electricity should therefore confirm that the redeemed certificates identify a qualifying renewable technology, such as solar generation. A generic “clean energy” certificate should not automatically be described as renewable without checking the source attribute.
The company should collect electricity consumption for the intended reporting period from:
Consumption should preferably be collected by legal entity and site. This makes it easier to identify the beneficiary and match the correct certificate quantity to each facility.
Before procurement, management should decide whether the certificates will support:
The purpose affects the required certificate geography, production period, technology and beneficiary description.
The company should review:
The GHG Protocol requires contractual instruments used in market-based Scope 2 accounting to meet its Scope 2 Quality Criteria. These cover matters such as exclusive ownership of attributes, certificate retirement, appropriate vintage and an eligible market boundary.
Purchasing a certificate commercially is not the final reporting step. It should be transferred and redeemed for the correct end user.
Redemption removes the certificate from further circulation and associates it with the beneficiary, electricity consumption period and stated purpose. The resulting redemption statement is the key evidence supporting the company’s claim. I-TRACK explains that the statement can prove the allocation of specified energy attributes to a particular end user while helping ensure that each MWh is claimed only once.
A complete evidence file should contain:
This information should be retained with the company’s ESG and greenhouse gas reporting records.
I-REC certificates may support the market-based method of Scope 2 accounting where the relevant contractual instruments satisfy the GHG Protocol’s Quality Criteria. The location-based method continues to reflect the average emissions characteristics of the grid serving the company’s location. The two figures communicate different information and should not be treated as interchangeable.
A company might therefore report:
| Scope 2 measurement | Illustrative result |
| Location-based Scope 2 emissions | 2,500 tCO₂e |
| Market-based Scope 2 emissions after qualifying certificate redemption | 800 tCO₂e |
| Electricity covered by renewable certificates | 75% |
These figures are illustrative only. The actual market-based result depends on certificate coverage, qualifying instruments, contractual information and the emission factors applied.
IFRS S2 requires companies applying the standard to disclose Scope 2 emissions using a location-based approach and to provide relevant information about contractual instruments where this helps users understand the company’s Scope 2 emissions.
Where certificate results will appear in a public disclosure, the evidence and wording should be integrated into the company’s wider ESG Reporting process.
The safest approach is to describe exactly what the company procured and redeemed.
Certificates address specified electricity attributes. They do not automatically cover fuel combustion, refrigerants, business travel, purchased products, logistics or other Scope 1 and Scope 3 emissions.
A manufacturer consumes 20,000 MWh of electricity during the reporting year. It procures and redeems 20,000 solar certificates with an appropriate vintage and beneficiary description.
The company may be able to state that redeemed renewable electricity certificates correspond to its reported electricity consumption, subject to the applicable market-based accounting criteria. It should retain both its utility data and redemption evidence.
A Dubai-headquartered company wants to cover electricity used by offices across several emirates. Before procuring certificates, it should confirm the appropriate market boundary, generation geography, certificate vintage and beneficiary locations rather than assuming that any international certificate can support its UAE consumption.
A retailer procures certificates for electricity used in selected controlled stores. Its disclosure should identify which stores and how much consumption was covered. It should not imply that leased stores, warehouses or franchise operations were included when their electricity data was outside the assessment.
“A credible renewable electricity claim depends on more than purchasing the right number of certificates. The company must establish whose consumption is being covered, which facilities are included, when the electricity was generated and whether the certificates have been redeemed for the correct beneficiary. The wording in the ESG report should then match the evidence shown in the registry.” — Nadia Farooq, Renewable Energy and ESG Consultant at IFRSLAB
IFRSLAB supports UAE companies in developing an evidence-based I-REC procurement process aligned with their electricity consumption, ESG objectives and reporting requirements. The engagement begins with a review of the organisation’s electricity data, legal entities, operating sites and intended renewable energy claim. This establishes the required certificate volume, beneficiary structure, production period and preferred generation technology.
IFRSLAB then supports the sourcing, allocation and redemption of appropriate certificates while maintaining a clear evidence trail between utility consumption, registry records and the final redemption statement. Particular attention is given to technology selection, vintage, market relevance and the wording of renewable electricity claims.
Where certificates are used within carbon accounting or ESG reporting, IFRSLAB helps management distinguish between location-based and market-based Scope 2 information and incorporate the results into a technically consistent disclosure. This allows the company to demonstrate renewable electricity procurement without overstating its operational reductions or wider carbon performance.
Discuss your UAE renewable electricity and certificate requirements with IFRSLAB.
Nadia Farooq
Renewable Energy and ESG Consultant, IFRSLAB
Nadia advises organisations on renewable electricity procurement, I-REC certificate management, Scope 2 accounting and ESG disclosures. Her work focuses on establishing traceable connections between corporate electricity consumption, certificate redemption and credible sustainability claims.
One I-REC(E) represents the energy attributes associated with one MWh of electricity generation. For a renewable electricity claim, the certificate should identify an eligible renewable source.
A company should make the claim only after checking that the certificates match its consumption, geography, reporting period and renewable technology requirements, and after the certificates have been redeemed for the correct beneficiary. The claim should state the level and nature of coverage accurately.
The accredited registry records certificate issuance, legal ownership, transfers and redemption. Once redeemed, a certificate is allocated to the stated beneficiary and cannot continue circulating for another end user’s claim.
Yes. Redeemed certificates can support renewable electricity disclosures and market-based Scope 2 reporting when the relevant reporting criteria are met. The report should disclose the methodology, coverage, certificate type and limitations rather than presenting a general unsupported renewable energy statement.
No. I-REC certificates track electricity-generation attributes, while carbon credits represent quantified emissions reductions or removals under separate standards and accounting systems. Purchasing an I-REC does not offset Scope 1 or Scope 3 emissions.
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