The business landscape is undergoing a critical transformation. As environmental, social and governance (ESG) expectations grow more urgent, sustainability has evolved from a compliance obligation into a strategic lever for long-term success. Global disruptions – whether climate-related, geopolitical or supply-driven – have shown that robust supply chain resilience is more important than ever before. Companies across the world, particularly in the Gulf, are realizing that embedding sustainability into procurement operations is essential not just for survival but for competitive leadership.
No longer seen as a side initiative or compliance checkbox but a strategic lever for value creation, sustainability is now backed by growing executive confidence. A recent Morgan Stanley survey found that nearly nine out of ten companies (88%) view sustainability as a source of business value, up three percentage points from the previous year. Leaders are increasingly attributing this value to benefits such as higher profitability, revenue growth and a lower cost of capital. Critically, 83% of executives now report being able to quantify the return on investment (ROI) from sustainability initiatives, on par with traditional investments – reflecting advances in data, measurement and internal accountability.
Despite ongoing cost pressures and tariff uncertainties, companies continue to prioritize sustainability. Recent data from EcoVadis shows that 87% of US companies have maintained or increased their sustainability investments since the beginning of 2025. This persistence demonstrates that, even in periods of economic strain, business leaders recognize the strategic imperative of sustainable practices. Far from being a discretionary expense, sustainability is seen as crucial for operational efficiency, long-term growth and organizational resilience.
A sustainable supply chain is not only a lever for growth – it’s a critical foundation for risk management and resilience. In today's interconnected world, supply chain disruptions are frequent, often stemming from third-party failures or climate-related events. By proactively embedding sustainability and robust ESG management, businesses can mitigate diverse risks – from environmental impacts and social issues to governance gaps. This strategic approach enhances your supply chain's ability to anticipate and respond to disruptions, minimize downtime, and ultimately gain a competitive edge in an increasingly volatile global market.
Why This Matters Now for GCC Business Leaders
For business leaders in the Gulf Cooperation Council (GCC), the global shift towards sustainability is amplified by ambitious national agendas and a rapidly evolving regulatory environment. The United Arab Emirates, for instance, has demonstrated its commitment with the Federal Decree-Law No. (11) of 2024 on the Reduction of Climate Change Effects, which came into force on May 30, 2025. This landmark legislation mandates that companies exceeding 0.5 million metric tons of CO₂e (Scope 1 and 2) monitor and report emissions, develop reduction strategies, track emissions over five years, and identify climate-related risks. These requirements are not just about regulatory compliance – they reflect a broader national commitment to sustainability, exemplified by forward-looking initiatives such as Masdar City, a low-carbon urban development to showcase clean technology and sustainable innovation.
Similarly, Saudi Arabia's Vision 2030 reinforces this regional imperative, driving economic diversification through mega-projects like NEOM, which are embedding sustainability at their core. Across the region, stakeholder expectations are rising – investors, customers and even employees are demanding credible ESG performance, particularly in areas like human rights due diligence and decarbonization.
This increased scrutiny is exposing the limitations of outdated methods like manual processes, basic Self-Assessment Questionnaires (SAQs) and Excel-based tracking. In fact, EcoVadis data reveals that up to 80% of documents provided by suppliers in first-time assessments are inaccurate or incomplete, leading to poor data quality, inflexibility, and unnecessary costs. This inefficiency can equate to an estimated $2 million annually for 1,000 suppliers in operational overhead. In a region moving swiftly toward advanced sustainability goals, relying on manual or ad hoc systems risks not only non-compliance, but reputational damage and missed competitive advantage. Investing in intelligent third-party solutions is now essential to gain the visibility, accuracy and scalability needed to meet stakeholder expectations and future-proof your supply chain.
A Best Practice Approach: Five Steps to a More Sustainable Supply Chain
Dubai Holding, EGA & ExpoCity Dubai at the EcoVadis Sustainable Procurement Roundtable in Dubai, May 2025
Navigating this complex landscape requires a clear, actionable strategy. A best practice approach for businesses looking to enhance their supply chain sustainability often involves these five key steps:
-
Understand and Prioritize: Begin by gaining comprehensive visibility into your supply chain's environmental, social, and ethical hotspots. This allows you to focus your efforts where they will have the most impact and where risks are highest.
-
Gather Trusted Data: Move beyond unreliable self-assessments. Implement mechanisms to collect accurate, primary data directly from your suppliers. This foundational step is crucial for credible reporting and effective decision-making.
-
Engage and Empower Suppliers: Supplier engagement is critical to shared success. Work closely with your suppliers, providing them with the tools, training, and support they need to improve their own sustainability performance and build their carbon capabilities.
-
Mitigate Risks and Drive Decarbonization: Actively manage identified risks and implement strategies to reduce your supply chain's carbon footprint, particularly focusing on Scope 3 emissions. This strengthens resilience and contributes to global climate goals.
-
Ensure Compliance and Continuous Improvement: Stay ahead of evolving regulations and stakeholder expectations. Regularly measure and report your progress, using insights to drive iterative improvements and demonstrate your commitment to a more sustainable future.
Your Partner in Sustainable Transformation in the GCC
EcoVadis supports companies with trusted data and insights to build resilient, compliant supply chains. Our platform simplifies your path to compliance with evolving regulatory frameworks – such as the UAE’s Federal Decree-Law No. (11) of 2024 – enabling you to monitor GHG emissions, implement effective reduction strategies, and identify climate-related risk with confidence. We help organizations across the GCC align procurement practices with ambitious national visions such as the UAE Net Zero by 2050 initiative and Saudi Arabia’s Vision 2030. As stakeholder demands and regional regulations evolve, we equip your business with the visibility and intelligence needed to stay ahead – delivering long-term value, mitigating risk and ensuring your supply chain is future-ready.
About the Author
Follow on Twitter Follow on Linkedin Visit Website More Content by EcoVadis EN
