CEOs in Qatar are less engaged in embedding ESG strategies compared to global counterparts, with only 44% fully integrating it for value creation. This lag may stem from an emerging regulatory environment and a slower adoption rate. CEOs recognise ESG's long-term benefits in enhancing brand, customer relations, and talent attraction, despite potential challenges like increased costs and stakeholder scrutiny. Overall, ESG is seen as a transformative force, not just a trend, in corporate strategy.

The Qatar embedding rate could be attributed to an emergent ESG regulatory environment and laggard approach to ESG, compared to other markets with a more mature regulatory environment, institutional infrastructure, and early adopters.

When asked whether CEOs have changed the language in which they refer to ESG internally and externally, 12 percent conveyed that they have, 32 percent have not, and 56 percent were noncommittal. This provides an opportunity for more to be done at an institutional level to promote and embed ESG vocabulary and practices, and to build stakeholder capital since they will be instrumental in contributing to the organizational growth.

CEOs understand the significance of ESG for their business and expect it to contribute to value creation by playing a pivotal role in enhancing their brand and reputation, building better customer relationships, and attracting the next generation of talent.

44 %

of Qatar's CEOs say they have fully embedded ESG into their business as a means of value creation...

...and they expect to see returns from their investments in:

  3 to 5 years

  5 to 7 years

The potential for growth and positive change through ESG is undeniable. Qatar's CEOs have a golden opportunity to harness this momentum, strengthen stakeholder bonds and elevate their ESG initiatives to help drive long term sustainable growth.

Omar Mahmood
Partner, Head of Financial Services
KPMG in Qatar

CEOs are also fully aware of stakeholder’s ESG expectations and scrutiny and acknowledge the potential negative impact on their business. Key negative impacts noted are the higher cost of and/or difficulty in raising finance (32 percent), disengaged employees (28 percent), threat to continued tenure (28 percent), competitor advantage (8 percent), and loss of customers (4 percent). Nevertheless, they are confident (63 percent) that their ESG approach is able to withstand stakeholder scrutiny while 38 percent are not. CEOs can view this as an opportunity to clearly define their ESG stakeholders, strengthen these relationships by creating greater awareness of their ESG activities, and being more inclusive of these stakeholders in their ESG related activities.

Principal downside of failing to meet the expectations of stakeholders when it comes to ESG

Source: KPMG 2023 CEO Outlook

Our commitment to ESG principles goes beyond a trend – it's a fundamental force shaping our organization. We weave these principles into our business plans, fostering trust, delivering value, and championing an inclusive, sustainable future. Our dedication to exemplary corporate governance ensures we fulfill societal obligations, setting new milestones in ESG integration for a resilient and adaptable future.

Abdul Hakeem Mostafawi
HSBC Qatar

Overall, ESG integration is a growing consideration for CEOs, with varying degrees of adoption. Qatar's CEOs lag behind their global counterparts in embedding ESG, potentially due to emerging regulations and a slower uptake. CEOs recognize ESG's long-term value in brand enhancement, customer relations, and attracting future talent. They have the opportunity to fortify stakeholder relationships and amplify their ESG endeavours. Despite potential negative impacts, such as financial challenges and stakeholder scrutiny, the overarching sentiment is that ESG is not a fleeting trend but a transformative force for businesses.