News | Top 3 Sustainability Updates for SMEs in the GCC 2025
Top 3 Sustainability Updates for SMEs in the GCC 2025
Small and medium enterprises (SMEs) in the Gulf region face a wave of new sustainability regulations and initiatives. These changes are critical for compliance and offer growth and competitiveness advantages. For example, experts note that modern consumers and businesses increasingly favor environmentally
conscious companies , and getting ahead of incoming regulations provides firms more stability . The following are three key sustainability updates for 2025 that GCC SMEs should know
1. UAE Enacts Climate Law Mandating Emissions Reporting
What it is: The UAE passed Federal Decree-Law No. 11 of 2024 on the Reduction of Climate Change Effects (effective May 30, 2025), making it legally mandatory for every company (including free-zone businesses) to measure, track and report greenhouse gas emissions . Large emitters (500,000+ tonnes CO₂e per year) must monitor and disclose their emissions, while smaller firms can join the tracking and carbon trading scheme voluntarily .
Why it matters to SMEs: Crucially, the law covers all entities regardless of size , so UAE SMEs will need to start carbon accounting and management now. Early compliance not only avoids future fines but also reveals efficiency gains. For example, sustainable practices often lead to cost savings and meet increasing customer demand for green business , and tackling emissions proactively
helps mitigate regulatory risk . Solara’s Take: Start mapping your emissions today – proactive tracking ensures compliance and uncovers savings.
2. Saudi Arabia Launches Voluntary Carbon Credit Scheme
What it is: Saudi authorities are rolling out a voluntary domestic carbon market (launching in 2024) under Article 6 of the Paris Agreement . It will be project-based and cover all sectors, enabling companies to generate or buy internationally recognized carbon credits as offsets.
Why it matters to SMEs: This creates new opportunities for small businesses. SMEs that invest in emissions-reducing projects (like energy efficiency or waste reduction) could earn credits to sell, opening a revenue stream. Others may plan to buy credits to meet corporate sustainability goals. In either case, early movers can monetize climate efforts, while all firms should be ready for a market where carbon liabilities become a cost consideration.
Solara’s Take: Look for ways to cut emissions now – any credits generated can become assets, and being ready for this market turns a potential cost into competitive advantage
3. Oman Unveils Sustainable Finance Framework
What it is: In January 2024, Oman’s Ministry of Finance announced the country’s first Sustainable Finance Framework to reduce reliance on fossil fuels and attract ESG investors . The plan includes issuing green, social and sustainability bonds and sukuk (Islamic bonds) to fund and refinance
renewable energy and low-carbon projects .
Why it matters to SMEs: This framework will channel more capital into “green” ventures. SMEs can tap new funding sources for clean-tech or efficiency upgrades. In practice, firms embracing sustainability often find green loans, subsidies and investor support more accessible . Small
businesses in Oman and across the region should position their projects to qualify for such green financing, improving credit terms and attracting investment.
Solara’s Take: Explore green financing options – from certified loans to bond-backed funding – to support your energy-efficient or renewable initiatives.