At BDO, we’ve had the privilege of supporting businesses ranging from family-run enterprises and ambitious SMEs to well-established corporates on their ESG and sustainability journeys. What we’ve consistently observed is this:

ESG is no longer a ‘nice-to-have’. It’s a strategic imperative.

From increasing investor scrutiny to the emergence of global standards such as the Global Reporting Initiative (GRI), Task Force on Climate-related Financial Disclosures (TCFD), Corporate Sustainability Reporting Directive (CSRD), International Sustainability Standards Board (ISSB), and local commitments under the UAE Net Zero 2050 Strategy, ESG has firmly moved to the top of the boardroom agenda.

Yet, while awareness is growing, implementation remains a challenge. Many businesses still find themselves asking: “Where do we begin?”, “How do we keep up?”, or “Are we doing enough?”

This article shares the eight most common ESG challenges we’ve encountered among UAE companies and more importantly, how to move from confusion to clarity, and from intent to impact.

1. “Where do we even start?” – No clear ESG strategy

The challenge: It’s easy to feel overwhelmed. Climate change, social responsibility, governance structures, supply chain ethics, where should you even begin?

The solution: Start with a materiality assessment. This process identifies the ESG issues most relevant to your stakeholders and your business risk profile. Use these insights to design a practical roadmap with achievable milestones.

Start small, focus on what matters most, and scale as you grow.

2. “We don’t have the data” – Lack of ESG reporting systems

The challenge: Many organisations face gaps in data collection, making it difficult to report consistently or credibly to regulators, investors, or internal teams.

The solution: Build a scalable ESG data foundation. Whether it’s carbon emissions, workforce diversity, or board governance KPIs begin tracking with simple, fit-for-purpose systems that can evolve over time.

You don’t need perfect data to get started, you just need to start.

3. “Is this just PR?” – ESG seen as a box-ticking exercise

The challenge: Without leadership buy-in, ESG risks being siloed, viewed as a marketing or compliance initiative, rather than a core business priority.

The solution: Embed ESG within your business strategy and financial performance indicators. Once decision-makers understand the commercial value, risk management, cost savings, brand trust - ESG becomes a business driver, not a burden.

When ESG is strategic, real results follow.

4. “We’re different” – Global standards vs. local reality

The challenge: Global frameworks like GRI, SASB, or TCFD don’t always reflect the UAE’s legal, cultural, or economic environment.

The solution: Localise global frameworks to fit the UAE context. Factor in Islamic finance principles, Emiratisation, and the country’s Vision 2031. You can maintain international credibility without losing local relevance.

Global standards, local lens, that’s the sweet spot.

5. “What if we get it wrong?” – Fear of greenwashing

The challenge: Many businesses hesitate to share their ESG efforts, fearing public backlash or being labelled as inauthentic.

The solution: Focus on transparency. Communicate what you’re doing, where you’re headed, and what’s still a work in progress. Stakeholders value honesty and steady progress more than perfection.

Don’t aim to be flawless, aim to be authentic.

6. “We don’t have ESG people” – Lack of in-house expertise

The challenge: Building an ESG function from scratch can be daunting, especially for smaller organisations without the internal skillsets.

The solution: Partner with external advisors who can guide, train, and even temporarily embed support until your in-house team is ready. ESG isn’t a solo journey - it’s a shared effort.

Capability can be built, with the right support.

7. “How do we fund this?” – Budget constraints

The challenge: Whether it’s transitioning to clean energy or improving supply chain traceability, ESG can appear costly upfront.

The solution: Focus on high-impact, low-cost initiatives to build early momentum. At the same time, explore green financing options, like sustainability-linked loans, government grants, or ESG-specific funding instruments.

ESG isn’t just a cost centre, it’s an investment in long-term resilience.

8. “What’s coming next?” – Navigating evolving regulations

The challenge: The ESG regulatory landscape is evolving rapidly, from the EU’s CSRD to UAE-specific taxonomy frameworks. For many businesses, keeping pace is a struggle.

The solution: BDO UAE supports clients with regulatory tracking, readiness assessments, and practical implementation support. We help simplify complexity into clear, step-by-step actions.

Stay ahead of the curve, not caught behind it.

ESG: A Transformation, Not a Task

Whether you’re a start-up, a listed company, or a family enterprise, ESG offers a powerful opportunity to future-proof your business. It’s not just about compliance, it’s about innovation, competitive advantage, and long-term value creation.

The path may be complex, but with the right guidance, UAE businesses can not only meet expectations, they can lead the way.

How BDO UAE can help

At BDO UAE, we’re not just consultants, we’re collaborators. And we’re ready to walk this journey with you.

Ready to turn ESG ambition into action? Let’s talk.