ESG Reporting in UAE: Federal Decree-Law 11 of 2024 Explained

In 2026, every public joint stock company (PJSC) in the UAE faces a binding legal obligation to disclose its environmental, social, and governance performance under Federal Decree-Law No. 11 of 2024. The UAE Securities and Commodities Authority (SCA) is the primary enforcement body. The UAE committed to Net Zero by 2050 at the launch of its Strategic Initiative in October 2021. COP28, hosted in Dubai in November and December 2023, drew 197 parties and produced a global stocktake that directly shaped the domestic policy timeline for ESG reporting in UAE. Over 10,000 organisations in more than 100 countries already use GRI Standards for sustainability disclosure (GRI, 2024). ISSB's IFRS S1 and S2 standards, published in June 2023, are now influencing national regulators worldwide, including in the UAE context. Private companies supplying listed entities are already receiving ESG questionnaires as part of vendor due diligence, whether they're ready or not.

This article breaks down what Federal Decree-Law No. 11 of 2024 means for ESG reporting in UAE, which entities are covered, what disclosures are required, which international standards apply, and the concrete steps private and free zone companies should take now to prepare before mandatory reporting trickles down the supply chain.

What Is Federal Decree-Law No. 11 of 2024 and What Does It Establish

Federal Decree-Law No. 11 of 2024 on Sustainability and ESG is the UAE's first dedicated federal law mandating environmental, social, and governance disclosures. It requires public joint stock companies to report ESG performance annually and creates a voluntary framework for private companies, free zone entities, and other businesses operating in the UAE.

ESG Reporting Obligations: Mandatory vs. Voluntary Under Federal Decree-Law No. 11 of 2024

The Core Purpose of the Law

The law formalises ESG as a regulatory obligation for listed companies, not a voluntary best practice. Before Federal Decree-Law No. 11 of 2024, the Abu Dhabi Securities Exchange (ADX) and Dubai Financial Market (DFM) had each issued their own ESG disclosure guidelines, but there was no unified federal mandate. This law consolidates and elevates those requirements into binding national legislation.

The Ministry of Economy and the SCA are the primary enforcement bodies. When the UAE hosted COP28 in Dubai in late 2023, domestic companies were positioned as spectators to an international climate conversation. This law changes that: UAE businesses are now active participants in the country's Net Zero 2050 commitments, with legal reporting obligations to match.

Mandatory vs. Voluntary Reporting Under the Law

PJSCs listed on the ADX or DFM face mandatory annual ESG disclosure. Private companies, free zone entities, and SMEs sit under a voluntary framework for now, but the SCA has authority to issue implementing regulations that could extend mandatory requirements over time. That's not a distant possibility, it's the stated direction of travel.

Here's the practical reality: a logistics company based at a UAE free zone supplying a PJSC listed on the ADX will face ESG questionnaires from that client. The mandatory obligation flows upstream through procurement, reaching private and free zone businesses whether or not they're technically subject to the law directly. Voluntary reporters who adopt the law's framework early build compliance capability before they need it.

Key ESG Disclosure Requirements Under UAE Law

Federal Decree-Law No. 11 of 2024 requires covered companies to disclose environmental impact metrics (carbon emissions, water, waste), social responsibility indicators (workforce diversity, labour practices, community impact), and governance standards (board composition, anti-corruption policies, executive remuneration). Reports must be material, verifiable, and consistent with recognised international frameworks.

Environmental Disclosure: What You Must Measure

• Scope 1 and Scope 2 GHG emissions: Direct emissions from operations and indirect emissions from purchased electricity. These are the baseline environmental disclosure under the law.

• Water consumption: Total usage, recycling rates, and water stress risk at each operating location. Given the UAE's arid climate, water scarcity is a material risk for virtually every business.

• Waste generation: Volumes by category, disposal methods, and any circular economy or diversion initiatives.

• Energy breakdown: Total consumption by source, including the percentage from renewables. As the UAE's grid shifts toward solar and nuclear, Scope 2 emission factors are changing, companies need to track this annually.

• Climate-related financial risks: Consistent with TCFD scenario analysis, covering both physical risks (heat, flooding) and transition risks (carbon pricing, stranded assets).

A manufacturing company in Dubai reporting for the first time under this law would need to calculate Scope 1 emissions from factory equipment, Scope 2 from electricity consumption, and document water usage per unit of production. Most companies have the underlying data in utility bills and operational records, they just haven't structured it for ESG purposes yet.

Social and Governance Disclosures: People and Accountability

Social indicators include Emiratisation rates (linked to the UAE's Nafis programme), gender diversity across management levels, employee health and safety performance data, and supply chain labour standards. Community investment programmes are also reportable. A publicly listed UAE retailer can't simply disclose its own labour practices, it needs evidence that key suppliers meet minimum social standards too, making supply chain ESG due diligence a practical operational requirement.

Governance disclosures cover board independence and diversity, audit committee structure, executive remuneration linked to sustainability targets, and anti-bribery and corruption policies. Whistleblower protection mechanisms and data privacy governance are within scope as well. Worth flagging: the SCA's corporate governance code already required some of these disclosures before 2024, so listed companies aren't starting from zero on the governance side.

How Federal Decree-Law 11 of 2024 Connects to UAE Sustainability Frameworks

Federal Decree-Law No. 11 of 2024 sits within a broader UAE sustainability architecture that includes the UAE Net Zero 2050 Strategy, the National Climate Change Plan, and the Dubai Sustainability Framework. The UAE ESG law operationalises these national commitments at the company level, translating government pledges into corporate reporting obligations.

UAE Net Zero 2050 Strategy and What It Means for Businesses

The UAE Net Zero by 2050 Strategic Initiative, launched in October 2021, commits the country to eliminating its net carbon contribution by mid-century. Federal Decree-Law 11 is the corporate accountability mechanism that supports this goal. When companies submit ESG reports, they're contributing data to the national greenhouse gas inventory, making their disclosures part of the UAE's formal international climate reporting obligations under the Paris Agreement.

The UAE pledged at COP28 to triple renewable energy capacity by 2030. That target requires private sector alignment, not just public infrastructure investment. ESG reporting in UAE is how the government tracks whether the private sector is keeping pace with national ambition. It's a feedback loop: better corporate data improves national policy, and national targets set the context for corporate ambition.

Dubai Sustainability Framework and Free Zone Alignment

The Dubai Sustainability Framework sets targets across energy, water, clean transport, green economy, and urban planning through 2030 and 2050 milestones. ESG reporting by companies operating in Dubai feeds directly into this city-level measurement system. Free zone authorities including DAFZA, JAFZA, and Dubai South are increasingly embedding sustainability criteria into licensing and renewal processes, creating a second layer of ESG pressure beyond the federal law.

Dubai South's 145 sq km master development is designed around smart, sustainable infrastructure. Companies based at Dubai South Business Hub are operating within a development that already tracks environmental performance metrics at the district level, giving them a structural head start on data collection that companies in older, less integrated developments simply don't have.

UAE ESG Reporting: Key Numbers at a Glance

A quick-reference visual summarising the most important statistics and milestones in UAE ESG reporting under Federal Decree-Law No. 11 of 2024.

• UAE Net Zero 2050 Strategic Initiative launched: October 2021

• COP28 hosted in Dubai: November–December 2023, 197 parties attended

• ISSB IFRS S1 and S2 published: June 2023

• GRI Standards used by: 10,000+ organisations in 100+ countries (GRI, 2024)

• First-time ESG reporters typically need 6–12 months to build reliable baseline data

• Dubai South master development covers: 145 sq km of sustainability-oriented infrastructure

Suggested alt text: Infographic showing six key statistics about UAE ESG reporting requirements under Federal Decree-Law No. 11 of 2024, including COP28 attendance, GRI adoption figures, and Dubai South development scale.

Reporting Standards UAE Companies Should Know

UAE ESG reporting draws on three main international frameworks: the Global Reporting Initiative (GRI) for broad sustainability disclosure, the Task Force on Climate-related Financial Disclosures (TCFD) for climate risk, and the ISSB's IFRS Sustainability Disclosure Standards (IFRS S1 and S2) for investor-focused reporting. Companies can use one or combine elements from multiple frameworks.

GRI, TCFD, and ISSB: What Each Framework Covers

• GRI Standards: The most widely used globally. They cover economic, environmental, and social topics for multi-stakeholder audiences including regulators, investors, customers, and employees. Over 10,000 organisations in 100+ countries use them (GRI, 2024).

• TCFD: Focuses specifically on climate-related financial risks and opportunities. Most relevant for companies with significant exposure to physical climate risks (heat, flooding) or transition risks (carbon pricing, policy change).

• ISSB IFRS S1 and S2: Published in June 2023, these are the emerging global baseline for investor-focused ESG reporting. S1 covers general sustainability disclosures; S2 covers climate. National regulators worldwide are already incorporating them.

• SCA position: The SCA has referenced international frameworks without mandating a single standard. You have flexibility, but you should choose one framework, apply it consistently, and document your rationale.

A UAE-listed bank with international investors would typically lead with ISSB/IFRS S2 for climate disclosures (investor-relevant) and use GRI for its broader social and governance narrative. Combining frameworks is standard practice among sophisticated reporters and is explicitly permitted under the UAE approach.

Materiality Assessment: Where ESG Reporting Actually Starts

A materiality assessment identifies which ESG topics are most significant to your business and your stakeholders. It's the foundation of any credible ESG report, and skipping it produces low-quality disclosures that don't satisfy investors, clients, or regulators.

GRI uses double materiality: it considers both the impact your business has on people and the environment, and the financial impact ESG issues have on your business. ISSB uses single materiality, focusing only on investor-relevant financial impacts. For UAE companies, material topics almost always include energy use, carbon emissions, water management, workforce composition, and governance transparency.

Which framework is right for your UAE business?

For most private and free zone companies starting out, GRI offers the broadest stakeholder coverage and the most practical SME-oriented resources. If you're primarily responding to investor pressure or supplying capital-markets-facing clients, ISSB/IFRS S2 is the more relevant starting point. Companies with significant climate exposure should layer in TCFD regardless of which primary framework they choose.

How Private and Free Zone Companies Should Prepare for ESG Reporting Now

Private and free zone companies in the UAE should begin ESG preparation by building internal data collection systems for environmental, social, and governance metrics, conducting a materiality assessment, mapping supply chain ESG expectations, and preparing for customer ESG due diligence requests, even before any mandatory obligation applies to them directly.

A process timeline showing five steps from assigning ESG ownership to choosing a reporting framework, helping UAE private and free zone companies prepare for ESG compliance under Federal Decree-Law No. 11 of 2024. Five Steps to ESG Readiness (UAE Private & Free Zone Companies) 1 Assign ESG Ownership 2 Materiality Assessment 3 Build Data Systems 4 Map Supply Chain Risk 5 Choose Framework

Five-step ESG readiness process for UAE private and free zone companies, aligned with Federal Decree-Law No. 11 of 2024 requirements (Dubai South Business Hub, 2026).

Six Steps to Build Your ESG Readiness Before It Becomes Mandatory

1. Assign internal ESG ownership. Appoint a named individual or small team responsible for ESG data collection and reporting. It can start as a part-time function, but it needs a named owner.

2. Conduct a materiality assessment. Use GRI 3: Material Topics 2021 methodology to identify which ESG topics matter most to your business and stakeholders. This is the step most companies skip, and it's the one that makes everything else credible.

3. Build data collection systems. Set up structured processes to capture energy consumption, water use, waste volumes, employee metrics, and governance documentation on a monthly or quarterly basis. First-time reporters typically need 6 to 12 months to build reliable baseline data before publishing.

4. Map your supply chain ESG exposure. Identify which suppliers pose ESG risks and which customers are likely to send you ESG questionnaires. ESG supplier questionnaires from listed UAE companies to their vendors are already in active circulation.

5. Choose a reporting framework. Select GRI, ISSB/IFRS S, or TCFD as your primary framework and document your rationale. Consistency matters more than perfection in year one.

6. Add ESG milestones to your company compliance calendar UAE. Align ESG reporting deadlines with your financial year-end to integrate disclosure with annual reporting production.

A trading company at Dubai South Business Hub supplying a PJSC retailer received an ESG supplier questionnaire in early 2024 covering carbon footprint, labour practices, and anti-corruption policies. Companies without baseline data either couldn't respond at all or submitted estimates that visibly damaged the client relationship. The six-month data-building window is not theoretical, it's the minimum viable timeline.

Follow the Supply Chain Signal: Why Your Clients Are Driving ESG Compliance

Listed UAE companies under mandatory ESG disclosure must report on supply chain sustainability. That obligation flows directly to their vendors and service providers through due diligence questionnaires, supplier codes of conduct, and ESG scoring in procurement decisions. These are the commercial mechanisms through which mandatory requirements reach private and free zone companies long before any regulatory expansion.

UAE sovereign wealth funds including Mubadala, ADQ, and ADIA are signatories to international ESG investment principles and are applying ESG criteria to supplier selection. A free zone manufacturing company without an ESG baseline is at a structural disadvantage in those tender processes. Companies that can provide structured ESG data win contracts; those that can't are increasingly excluded. The consumer demand for sustainable products UAE trend reinforces this pressure from the B2C side too.

What ESG Reporting Involves Practically: Data, Systems, and Outputs

Practical ESG reporting requires setting up systems to collect carbon emission data (Scope 1, 2, and where feasible Scope 3), water and waste metrics, workforce and diversity data, and governance documentation. The output is a structured annual ESG or sustainability report, typically audited by a third party and aligned to a recognised international standard.

Data Collection: The Practical Reality of ESG Measurement

• Carbon emissions: Convert utility bills (electricity, gas, fuel) to CO2 equivalents using published emission factors. DEWA and other UAE utility providers can supply historical consumption data on request, most companies already have this data, just not in ESG format.

• Water data: Metered consumption records from your facility manager or utility provider. Free zone utility providers typically supply this on request.

• Waste data: Coordinate with waste management contractors to obtain tonnage and disposal method records by category. This is usually the biggest data gap for first-time reporters.

• Social data: Headcount, gender split, nationality, training hours, and safety incidents typically exist in HR systems but need standardising for ESG disclosure format.

• Governance data: Board minutes, committee charters, and policy documents require a documentation audit to confirm what exists and what still needs to be created.

A mid-sized logistics operator at a UAE free zone completing its first ESG data collection exercise typically discovers it already holds about 80% of the required data. The gap is almost always in waste disposal records and supply chain labour standards documentation, two areas that require external coordination rather than internal data retrieval.

The ESG Report: Structure, Assurance, and Publication

A standard ESG report covers an executive message, company overview, materiality assessment results, performance data by topic, targets and progress, and a GRI or equivalent content index. Third-party assurance (limited or reasonable assurance from an independent auditor) increases credibility significantly. Limited assurance requires less evidence than reasonable assurance but provides a meaningful credibility baseline that satisfies most investor and client requirements.

Emaar Properties, one of the UAE's most prominent PJSCs, has published GRI-aligned sustainability reports with third-party assurance since the mid-2010s. That model is what Federal Decree-Law 11 of 2024 is progressively extending across the listed company universe. Free zone companies producing their first report don't need to match that scale immediately, a focused 20 to 30 page sustainability summary aligned to GRI Standards is a credible starting point.

Your Next Steps for ESG