Middle East primed to lead the transition to ESG compliance

• Approximately USD 2.5 trillion in projects are planned for the Middle East till 2050
• Energy consumption in buildings represents nearly 55% of global energy consumption
• Due to the pandemic, UAE residents now spend over 90% of their time indoors
• UAE leads the way with the highest share, 63% of LEED certified sq.ft in the Middle East, followed by Saudi Arabia at 20%

Dubai: Savills, the leading global real estate advisor, today launches its Middle East Environmental, Social and Governance (ESG) report, which aims to understand the status quo of ESG compliance across the real estate and construction sector and the way forward. Savills research analysed the various factors impacting the ESG strategies across real estate developments in the Middle East. Following the release of the report, a webinar dedicated to the topic will be hosted by Sophie Chick, Head of World Research at Savills who will be joined by Nadimeh Mehra, Vice President of District 2020; Qais Bader Alsuwaydi, Expert at the UAE Ministry of Climate Change & Environment; Rob Devereux, Chief Executive Officer at ICD Brookfield, and Dan Jestico, Sustainable Design Director at Savills. Together the panellists will discuss sustainability principles, regional and global ESG best practices, government initiatives, challenges on implementing ESG principles and the way forward for ESG and real estate in the Middle East.

Sophie Chick, Head of World Research at Savills said: “The environmental challenges facing us are very real. The fact that the built environment accounts for 40% of global annual greenhouse gas (GHG) emissions demonstrates the urgency with which our industry needs to address this issue. This has already begun as the value of achieving a 'green' building status is increasingly recognized and there is a growing drive towards more sustainable structures for the benefit of not only the environment, but also our overall wellbeing.”

Today, 55% of the world's population lives in cities, a figure that is projected to increase to over 68% by 2050 as the global population grows and urbanises. According to the OECD, with more people expected to live in cities, the global building stock is expected to double by 2050. According to Savills, the Middle East has also seen a surge in construction over the last decade, and this trend is set to continue as close to USD 2.5 trillion in projects are planned across the region. With real estate and construction already accounting for a sizable portion of global carbon emissions, increased construction activity will almost certainly contribute to increased global emissions and climate change.

By 2050, temperatures in the MENA region are expected to rise by an average of 4°C. Temperature records have been broken repeatedly in the region in recent years, with Kuwait recording the highest recorded temperature of 54°C in 2016. Some of the world's historically driest regions have also experienced flooding. In Oman, 60% of urban residents live along the Muscat and Al-Bathina coasts, which are particularly vulnerable to storm surges and the abrupt onset of sea level rise. This has raised significant awareness on the importance of looking beyond just the impact of the initial construction stage, but rather the day-to-day operations and their significant contribution to climate related issues. As per the International Energy Agency (IEA), electricity consumption in buildings represents nearly 55% of global electricity consumption.

Swapnil Pillai, Associate Director Research at Savills Middle East said: As urbanisation and population growth continue, the built environment will play a critical role in combating climate change. There are already solutions available to assist in the reduction of carbon emissions. These include innovative construction techniques and retrofitting existing structures. The use of technology and the growth in ‘smart’ buildings will improve energy efficiency and performance, whilst enhancing customer experience.

In the Middle East, governments are now focused on growing sustainably. This is being ensured through regulatory guidelines and development initiatives. The two biggest economies, United Arab Emirates and the Kingdom of Saudi Arabia are currently leading when it comes to such initiatives. The UAE leads the way with the highest share, 63% of LEED certified sq.ft in the Middle East, followed by Saudi Arabia at 20%. Moreover, the recent government initiatives such as Future Saudi Cities Program and Mostadam in Saudi Arabia and The Estidama Pearl Rating System (PRS) in Abu Dhabi and Sa’fa rating in Dubai indicate a positive trend.

Dan Jestico, Sustainable Design Director at Savills said: “Sustainability is rapidly becoming part of our daily lives, as we try to mitigate the impacts of the climate emergency. Buildings and communities with integrated ESG strategies present real opportunities for improving operational building performance and encouraging sustainable lifestyles. Global case studies and success stories should be developed to spread the word about world-class building efficiency and sustainability practices.”

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About Savills

Global property agents Savills provide an extensive range of residential and commercial services across the United Arab Emirates, Oman, Bahrain, Egypt, and Saudi Arabia. Established in the Middle East over 44 years ago, expertise includes everything from financial and investment advice to valuation, planning, and property management. Originally founded in the UK in 1855, Savills has a long-standing history and over 600 offices across the Americas, Europe, Asia Pacific, Africa, and the Middle East.

For further information about Savills: www.savills.com 

Media Contact: TOH PR / savills@tohpr.com 

© Press Release 2021