In 2026, UAE ESG reporting is not governed by one rule for every business. Listed public joint-stock companies must publish annual sustainability information through the Capital Market Authority and exchange framework. Banks, insurers, asset managers and other regulated firms may also face sector-specific climate-risk and disclosure duties. SMEs and ordinary free-zone companies are not automatically required to issue a full public ESG report merely because they operate in the UAE. However, the federal Climate Change Law applies to emissions “sources,” including free zones, and allows authorities to designate entities that must measure emissions, maintain inventories, submit reports and retain records. Businesses should therefore assess their legal category before deciding what and when to report.
The accurate answer is: it is mandatory for some businesses, while other businesses face conditional, sector-specific or developing requirements.
There is no single federal rule requiring every UAE company to publish the same type of ESG report. Instead, the reporting landscape is built around four main layers:
Understanding which layer applies is the first step towards compliance.
| Company type | ESG reporting position in 2026 | What the company should prepare | Priority |
| Listed public joint-stock company | Annual sustainability reporting is required as part of the integrated reporting framework. Exchange-specific ESG indicators also apply. | Sustainability report, governance disclosures, material ESG metrics, emissions data, board oversight and supporting records. | Mandatory and immediate |
| Mainland SME | A standalone public ESG report is not automatically required solely because the company is an SME. Federal emissions obligations may apply where the company is designated as an in-scope source. | Basic GHG inventory, utility and fuel data, environmental policies, employee data and regulatory applicability assessment. | Prepare and confirm scope |
| Ordinary free-zone company | The federal Climate Change Law expressly extends to sources in free zones. Specific reporting instructions may depend on MOCCAE and the relevant free-zone or local authority. | Emissions boundary, electricity, fuel, refrigerant, waste and operational data, plus records supporting calculations. | Confirm with the competent authority |
| ADGM entity | In-scope entities meeting the relevant turnover or AUM thresholds must comply or explain under the ADGM ESG Disclosures Framework. | Disclosure using a recognised framework such as ISSB, GRI, CDP or TCFD, submitted with annual accounts. | Mandatory when thresholds are met |
| Regulated financial entity | Banks, insurers, asset managers and other regulated firms may face climate-risk governance, monitoring, risk-management and disclosure expectations. | Climate-risk assessment, governance responsibilities, risk appetite, scenario analysis, metrics and regulatory reporting controls. | Regulator-specific |
Federal Decree-Law No. 11 of 2024 on the Reduction of Climate Change Effects became effective on 30 May 2025. It applies to emissions sources across the UAE, including businesses operating in free zones. The law defines sources broadly to include public and private legal persons and individual enterprises whose activities result in greenhouse gas emissions.
However, there is an important legal distinction that businesses should understand. Article 6 places detailed measurement, reporting and verification duties on sources determined by the Ministry of Climate Change and Environment and the competent authority, in coordination with the relevant government entity. Therefore, the law has broad reach, but businesses must still establish whether they have been brought within a particular reporting category, sector or implementation mechanism.
Where Article 6 applies, an entity may be required to:
The law provided entities with a one-year period from its effective date to adjust their status, pointing to 30 May 2026, while allowing this period to be extended through a Cabinet resolution. Companies should verify any current implementation guidance with MOCCAE, their local authority or their free-zone authority rather than assuming that reporting does not apply.
Violations of Article 6(1) may result in fines ranging from AED 50,000 to AED 2 million. The law also provides for penalties to be doubled where the same violation is repeated within two years of the final judgment.
An SME should not assume that it must immediately publish a long sustainability report following ISSB or GRI merely because the climate law exists. Equally, it should not ignore the law because it is small.
A sensible first step is to determine:
Local public joint-stock companies listed on UAE financial markets are subject to the Capital Market Authority’s corporate governance and integrated reporting requirements.
The current annual general meeting circular states that the integrated report should include the board report, auditor’s report, annual financial statements, governance report and sustainability report. It must be disclosed within the first three months of the financial year and at least ten days before the annual general meeting, whichever occurs earlier.
The sustainability component must follow instructions issued by the relevant UAE financial market.
The Abu Dhabi Securities Exchange states that its listed companies follow mandatory sustainability reporting and that it provides guidance covering essential ESG indicators. ADX also publishes the unified GCC ESG disclosure metrics, covering areas such as greenhouse gas emissions, energy, water, employee turnover, gender diversity, data privacy and business ethics.
An ADX-listed company should therefore ensure that its report is supported by:
Dubai Financial Market provides an ESG Reporting Guide to help listed companies improve sustainability disclosure and align reporting with UAE objectives, the Sustainable Development Goals and international capital-market practices. The DFM guide supports the wider mandatory sustainability reporting obligation arising under the corporate governance framework.
Listed businesses should avoid treating the DFM or ADX indicators as a simple form-filling exercise. The disclosed numbers must connect with actual policies, targets, risks and operational performance.
Abu Dhabi Global Market has its own ESG Disclosures Framework.
The framework generally applies to ADGM entities meeting either of the following thresholds:
In-scope entities must either comply with the disclosure requirements or explain their non-compliance. Reports must use a globally recognised standard, such as ISSB, GRI, CDP or TCFD, and are submitted with the company’s annual accounts. The requirement normally becomes mandatory in the entity’s third year of operation where the applicable thresholds are met.
Certain organisations are outside the framework or exempt, including some foundations, partnerships, restricted-scope companies, branches and listed entities already making equivalent disclosures. Businesses must assess the precise entity type rather than relying only on revenue.
Consider an ADGM-based asset manager that exceeds the AUM threshold. The company may need to disclose how climate and sustainability risks affect its investment strategy, governance, portfolio monitoring and decision-making.
A small ADGM professional-services company below the turnover threshold may not have the same mandatory disclosure obligation. It may still report voluntarily or provide ESG information to investors and clients.
Financial institutions face a more advanced climate-risk environment than many ordinary commercial companies.
The UAE Sustainable Finance Working Group has established common principles covering sustainability-related disclosures and the management of climate-related financial risk. These principles address governance, strategy, risk management, systems, materiality, transparency and the quality of entity-level and product-level disclosures.
The Central Bank’s Climate-Related Financial Risk Management Regulation was issued in October 2025 and is in force. It is intended to ensure that relevant financial institutions establish appropriate governance and risk-management processes for identifying and managing climate-related financial risks.
Within DIFC, the DFSA has adopted the UAE climate-risk principles as supervisory expectations. Its published position states that relevant firms should embed climate-risk identification, assessment and management within their strategies and decision-making processes. The DFSA had initially described its related guidelines as supervisory rather than formally binding, making it important for regulated firms to monitor subsequent regulator communications and rulebook changes.
A regulated entity should review its obligations directly against the rules and communications issued by:
The exact content depends on the company and reporting framework. However, a credible UAE ESG report will normally cover the following areas.
The report should identify who oversees sustainability at board and management level. It should also explain reporting lines, committee responsibilities, policies, internal controls and how ESG performance affects business decisions.
Businesses should explain the sustainability risks and opportunities that may affect operations, markets, financing, reputation and long-term financial performance.
The company should describe how it identifies, assesses, prioritises and monitors climate, environmental, workforce, supply-chain, ethics and governance risks.
Useful metrics may include:
IFRS S1 and IFRS S2 organise investor-focused disclosures around governance, strategy, risk management, and metrics and targets. GRI focuses more widely on an organisation’s significant impacts on the economy, environment and people.
| Framework or guidance | Most suitable for | Primary focus |
| IFRS S1 and IFRS S2 | Listed companies, financial institutions and investor-facing businesses | Sustainability and climate risks and opportunities affecting enterprise prospects |
| GRI Standards | Companies reporting to employees, communities, customers and wider stakeholders | Significant impacts on the economy, environment and people |
| ADX or DFM guidance | UAE-listed companies | Exchange-specific ESG disclosure expectations and metrics |
| GHG Protocol | Companies developing emissions inventories | Scope 1, Scope 2 and Scope 3 greenhouse gas accounting |
| ADGM ESG Framework | In-scope ADGM entities | Recognised ESG disclosure standard on a comply-or-explain basis |
IFRS S1 and IFRS S2 are designed to provide a global baseline of investor-focused sustainability-related information. GRI can supplement this by addressing the company’s wider environmental and social impacts. For many larger UAE businesses, the two approaches can be used together rather than treated as competing systems.
“The biggest ESG reporting risk in 2026 is starting with report design instead of regulatory scope and data quality. A polished sustainability report cannot correct unreliable emissions figures, missing evidence or unclear management responsibility. UAE businesses should first establish applicability, reporting boundaries, data owners and internal controls. The report should be the final output of the process, rather than the starting point.”
A logistics company may collect data on diesel consumption, company vehicles, electricity, refrigerant leakage, outsourced transportation and waste.
As a free-zone business, it should review the federal Climate Change Law and instructions from its competent authority. Even where a public ESG report is not yet required, this data may be requested by multinational customers evaluating supply-chain emissions.
A listed property developer will need a structured sustainability report covering areas such as construction emissions, building energy performance, water, waste, worker welfare, health and safety, board oversight and climate-related risks.
Its sustainability information must align with its annual reporting process and the applicable exchange guidance.
A bank’s ESG responsibilities extend beyond calculating electricity use in its offices. It may need to assess how physical and transition climate risks affect borrowers, collateral, sector concentrations, credit quality and long-term portfolio performance.
A manufacturer may need to calculate emissions from fuel combustion, purchased electricity, industrial gases, transport, waste and purchased materials.
The accounting team should help reconcile sustainability data with utility bills, supplier invoices, fixed-asset records, production data and financial ledgers.
International Renewable Energy Certificates can help UAE businesses document renewable electricity procurement for market-based Scope 2 reporting, provided the certificates satisfy the applicable quality requirements and are properly owned and retired.
The GHG Protocol explains that a company seeking to apply a zero-emission factor under the market-based method must retain and retire the relevant energy attribute certificates, including I-RECs, and meet the Scope 2 Quality Criteria.
However, purchasing I-REC certificates does not remove the need to:
Use this checklist before preparing a report:
IFRSLAB supports companies in moving from uncertain ESG obligations to a structured and evidence-based reporting process. This can include:
No single requirement forces every UAE company to publish the same comprehensive ESG report. Listed public joint-stock companies have mandatory sustainability reporting obligations, while regulated firms and certain ADGM entities face additional requirements. The federal Climate Change Law has broad application to emissions sources, but Article 6 reporting duties apply to sources determined by MOCCAE and the relevant competent authorities.
An ordinary SME is not automatically required to issue a full public sustainability report solely because of its size or UAE registration. It should still assess whether climate-law reporting applies to its activities and whether customers, lenders, investors or free-zone authorities require ESG data.
Starting with an emissions inventory and a short internal ESG baseline is usually more practical than immediately producing a lengthy public report.
Yes. Article 3 expressly states that the law applies to emissions sources in the UAE, including free zones. The precise measurement and reporting obligations will depend on whether the company is designated under Article 6 and on instructions issued by MOCCAE and the relevant competent authority.
The Capital Market Authority’s annual meeting circular requires the integrated report, including the sustainability report, to be disclosed within the first three months of the financial year and at least ten days before the annual general meeting, whichever occurs earlier. Companies must also comply with the sustainability-reporting instructions issued by their financial market.
No. I-REC certificates can support renewable electricity and market-based Scope 2 reporting when they are correctly procured and retired. They do not replace an emissions inventory, ESG governance, legal applicability review, reduction plan or reporting controls.
IFRSLAB provides ESG reporting, carbon accounting, sustainability advisory, I-REC services and professional sustainability training for organisations operating in the UAE and wider region. Its advisory approach connects sustainability requirements with governance, financial reporting, operational data and practical implementation.
No single requirement forces every UAE company to publish the same comprehensive ESG report. Listed public joint-stock companies have mandatory sustainability reporting obligations, while regulated firms and certain ADGM entities face additional requirements. The federal Climate Change Law has broad application to emissions sources, but Article 6 reporting duties apply to sources determined by MOCCAE and the relevant competent authorities.
An ordinary SME is not automatically required to issue a full public sustainability report solely because of its size or UAE registration. It should still assess whether climate-law reporting applies to its activities and whether customers, lenders, investors or free-zone authorities require ESG data.
Starting with an emissions inventory and a short internal ESG baseline is usually more practical than immediately producing a lengthy public report.
Yes. Article 3 expressly states that the law applies to emissions sources in the UAE, including free zones. The precise measurement and reporting obligations will depend on whether the company is designated under Article 6 and on instructions issued by MOCCAE and the relevant competent authority.
The Capital Market Authority’s annual meeting circular requires the integrated report, including the sustainability report, to be disclosed within the first three months of the financial year and at least ten days before the annual general meeting, whichever occurs earlier. Companies must also comply with the sustainability-reporting instructions issued by their financial market.
No. I-REC certificates can support renewable electricity and market-based Scope 2 reporting when they are correctly procured and retired. They do not replace an emissions inventory, ESG governance, legal applicability review, reduction plan or reporting controls.
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