Jordan’s primary policy on climate change is the National Climate Change Policy
and Sector Strategic Guidance Framework. The country emphasizes adaptation,
rather than mitigation, intending to achieve socio-economic development and
environmental resilience. Priority sectors include water, agriculture, energy,
land use, and desertification. Climate adaptation and mitigation for green
growth have proven challenging and remain highly conditional on the
availability of financing.
اضافة اعلان
Jordan’s
general budget has been in chronic deficit, and the economy remains highly
vulnerable to external shocks. Given the gap between Jordan’s climate goals and
its public finances, climate action will require a shift in national planning
and budgeting to allocate domestic resources for mitigation and adaptation.
Therefore, the growing business imperative to address sustainability, despite
the Kingdom’s risks, is broadening and becoming more complex. The mounting
risks have led to a global sustainability movement driven by capital markets,
communities, and various stakeholders. The demand for accountability in
environmental, social, and governance (ESG) matters calls for a better
understanding of the impact of business and industry on the environment and
society.
The structuring of a sustainable financing framework
should be a strategic step in line with the Kingdom’s vision aiming at
sustainability and ESG commitment.
Bloomberg
Intelligence expects ESG investments to reach over $50 trillion by 2025,
meaning that ESG investments at the time would account for one-third of global
assets under management. Ultimately, government and private sector leaders must
increasingly consider ESG as part of their DNA, irrespective of industry and
geographic exposure. This macro trend is gaining momentum in overall strategy.
Europe is leading the way, with over 80 percent of
global ESG assets concentrated on the continent. ESG, as a concept, is
relatively new in the Middle East. Still, it is critical to Jordan’s ambition
that needs to embrace it, as it is central to its effort to develop a more
sustainable economic landscape that can drive long-term economic growth.
Jordan needs a Green Ocean Strategy to excel in ESG guidelines and act as a catalyst to reach a continuously innovative and sustainable approach by utilizing primarily its human intellectual capital in an unbiased and democratic way.
A strong ESG proposition allows companies to tap
into new markets and expand into existing markets. ESG can be part of
government incentives for companies that contribute to society, and which
should be more easily awarded licenses, access, and approvals to grab
opportunities for growth while creating social value.
Improving ESG performance comes with many benefits:
reduced costs, better stock performance, and increased customer and employee
loyalty. One key stakeholder group is that of employees, especially within the
“start-up” ecosystem. Today, the demographic group of millennials makes up the
majority of the workforce, followed by Gen Z. Together, they account for almost
half of the workforce population. These two groups are amenable to adopting
ESG-related corporate visions, missions, and ambitions. A strong ESG
proposition can help attract talented employees to the organization.
There are several ways ESG can help lower operating
expenses. It often focuses on reducing energy consumption, which can help
companies save money on utilities. It emphasizes strategies to reduce water and
raw material usage. ESG can help companies save money by eliminating waste and
improving resource efficiency as these resources become more expensive.
Companies need a robust set of tools that will help
them track, report, and manage resource usage, carbon emissions, safety
performance, and other metrics to drive greater efficiency and better financial
performance. McKinsey found that ESG strategies can affect operating profits by
as much as 60 percent.
Jordan needs a Green Ocean Strategy to excel in ESG
guidelines and act as a catalyst to reach a continuously innovative and
sustainable approach by utilizing primarily its human intellectual capital in
an unbiased and democratic way. This strategy should include a business
transformation framework and serve as a powerful vehicle to raise awareness
about the importance of ESG among Jordanian companies, and encourage companies
to disclose and report their ESG performance. At the same time, the government
offers the companies structure and support in their ESG journey, moving forward
with renewable energy, water, electricity, and carbon-management projects.
Hamzeh S. Al-Alayani is a board member of a Jordanian public-sector
government investments management company and a regular commentator on regional
energy and industrial matters.
Read more Opinion and Analysis
Jordan News
.jpg)
.jpg)
