DUBAI, 8th May, 2023 (WAM) — The report, titled 'Nurturing Natural Capital: The Middle East Imperative' released by the World Government Summit, in partnership with the global management consulting firm Oliver Wyman, focuses on enhancing reporting by the private sector and financial institutions in the Middle East by including information about how they both impact and depend upon nature and natural capital.
The report also points to the Taskforce on Nature-related Financial Disclosures (TNFD) as a framework that could help companies in the region assess, report and act upon nature-related risks and opportunities.
The report indicates that with almost half of the Middle East's GDP either highly or moderately dependent on the environment, the consequences of environmental and natural degradation are severe, particularly for those key industries that rely on nature, such as agriculture, fisheries, tourism, and seawater desalination.
Mohamed Yousef Al Sharhan, Managing Director of the World Government Summit Organisation, stressed the importance of strengthening partnerships and cooperation between governments and the private sector, including working to achieve sustainable development goals and targets, and enhancing shared responsibility to find quick solutions for nature-related challenges and climate change.
He added that the World Government Summit is a global knowledge exchange platform to study challenges and explore solutions. It convenes leaders from governments and the private sector in different fields and contributes to creating a better future for the next generation and achieving sustainability in the long term.
Johnny Ayoub, Partner at Oliver Wyman, and the firm’s regional lead on Climate and Sustainability, a co-author of the report, said, “There is a lot for the Middle East to lose if it does not address nature-related risk urgently — and a lot for it to gain if it does, increasing sustainable financing opportunities, and thus attracting the capital required for the pipeline of ambitious transformation projects across the region."
He added, “The private sector in the Middle East, if guided by the principles put forward by the TNFD framework, can – and surely will – become a formidable force in the fight for nature.”
Faced with a number of environmental challenges specific to the region, including scarce water resources and desertification, governments in the Middle East have developed a range of environmental policies, regulations and tools aimed at protecting their natural and environmental capital.
These include the UAE's efforts to protect and restore its mangroves, doubling the number of mangroves in the country in the past 30 years (at a time during which 22% of mangroves were lost in the rest of the world). The Kingdom of Saudi Arabia, meanwhile, has been driving efforts to protect and restore coral reefs in the Red Sea.
In contrast, the contribution from the Middle East's private sector in addressing nature-related loss has been minimal, according to the new report. It goes on to argue, however, that with the right frameworks and enablers in place, the private sector's support can be significant — as demonstrated by its efforts in addressing the challenges of climate change.
The Taskforce on Nature-related Financial Disclosures, set up in 2021, is developing a risk management and disclosure framework that guides institutions to report and act on evolving nature-related risks.
At the heart of the framework is the 'LEAP' process, which encourages companies to Locate their interfaces with nature, Evaluate their dependencies and impacts, Assess their risks and opportunities, and Prepare to address nature-related risks and opportunities. The fourth and final beta version of the framework was released in March 2023.
The report also discusses the key learnings that emerged when FirstRand Group in South Africa implemented the framework. These included the necessity of a visible show of support from executive leadership teams; informing the approach to nature with the experience and insights gleaned from addressing climate risks; developing a comprehensive nature-related assessment; and considering additional tools beyond disclosure.
For more information and to read the full report, please visit: https://www.worldgovernmentsummit.org/observer/reports/2023/detail/nurturing-natural-capital