From Vision to Action: How Finance & Procurement Drive ESG in the Middle East

• Contributors: Kush Ahuja, Head of Eurasia and Middle East at ACCA; and Sam Achampong, Regional Director of CIPS

As global challenges – from climate change to resource scarcity – intensify, regional businesses are increasingly recognising the strategic imperative of embedding Environmental, Social, and Governance (ESG) principles into their operations. In this context, finance and procurement teams are playing a crucial role in aligning corporate strategies with sustainability goals. Here, Kush Ahuja, Head of Eurasia and Middle East at ACCA, and Sam Achampong, Regional Director of CIPS, provide valuable insights into how these functions can collaborate to advance ESG priorities.

Collaboration between finance and procurement: A new imperative

As sustainability becomes a top priority for businesses globally, the integration of ESG criteria into corporate strategies is essential. In this transition, both finance and procurement teams are emerging as critical partners, leveraging their distinct yet complementary expertise. Finance teams bring their proficiency in quantifying the value of sustainable investments and aligning them with long-term profitability, while procurement professionals ensure these investments are underpinned by ethical and sustainable sourcing practices. This collaborative dynamic is instrumental in embedding ESG principles across entire value chains and achieving meaningful sustainability outcomes.

Ahuja highlights: “Finance professionals are critical in quantifying the value of sustainable investments, enabling businesses to make informed decisions that balance profitability with long-term impact. Through transparent ESG reporting and risk management, accountants can guide organisations toward greener pathways.”

Achampong adds: “Procurement professionals are in a position of responsibility to ensure ethical and sustainable sourcing. By working closely with finance teams, they can align procurement policies with broader ESG goals, ensuring the entire value chain contributes to a company’s sustainability agenda.”

This collaboration is particularly significant in the Middle East, where mega-projects and transformative initiatives such as NEOM and Masdar City are setting global benchmarks for sustainable development. Finance teams can identify and allocate capital for green projects, while procurement ensures these investments are executed responsibly through sustainable supply chains.

The evolving ESG compliance landscape

The regulatory environment surrounding ESG is rapidly evolving, with governments across the Middle East introducing stricter compliance requirements. From the UAE’s Net Zero by 2050 initiative to Saudi Arabia’s Vision 2030, organisations are under increasing pressure to demonstrate their commitment to sustainability.

“The demand for consistent ESG reporting standards is growing,” explains Ahuja. “At ACCA, we encourage finance professionals to adopt frameworks such as those developed by the International Sustainability Standards Board (ISSB) to ensure transparency and comparability in ESG disclosures. This is critical for attracting investment and building trust among stakeholders.”

The numbers are compelling. A 2023 report by the World Economic Forum highlights that $2.4 trillion annually is required to transition to a low-carbon economy globally by 2030. Additionally, green bond issuance has surged, reaching a projected $500 billion in 2024, reflecting growing investor appetite for sustainable projects.

Achampong highlights the importance of embedding ethical procurement practices to meet these compliance requirements. “Procurement functions must integrate ESG criteria into supplier selection and contract management processes. This means prioritising suppliers who adhere to fair labour practices, reduce carbon emissions, and minimise environmental impact,” he says. Recent studies also indicate that companies with strong ESG practices see a 10-20% increase in valuation compared to peers who lag behind.

Key challenges and opportunities

Integrating ESG principles into finance and procurement is not without challenges. One of the primary hurdles is resistance to change within organisations. Achampong comments: “Implementing new ethical procurement policies often requires a cultural shift, which can face pushback from stakeholders who are accustomed to traditional practices. However, with the right training and leadership, this resistance can be overcome.”

Ahuja agrees that ESG brings fresh ethical challenges but sees financial professionals as uniquely well-placed to help businesses manage the ethical dilemmas they regularly encounter. A recent ACCA report on ethical dilemmas highlights that 54% of finance professionals have faced pressure to act unethically in their roles, underscoring the need for strong ethical leadership. “With the right frameworks and governance in place, finance teams can play a pivotal role in navigating these challenges, ensuring ESG commitments translate into real-world impact while maintaining business integrity,” Ahuja comments.

Another challenge is the lack of consistent ESG data. “Without reliable metrics, it becomes difficult to measure progress and make informed decisions,” says Ahuja. “Finance professionals must advocate for the adoption of robust data collection and reporting systems to bridge this gap.”

Despite these challenges, the opportunities are immense. Organisations that successfully integrate ESG into their strategies can unlock new revenue streams, enhance brand reputation, and mitigate risks. For example, businesses that adopt sustainable procurement practices often realise cost savings through improved resource efficiency and reduced waste. Moreover, the shift towards ESG compliance is increasingly demanded by consumers, 76% of whom say they prefer brands aligned with their ethical values.

Practical steps toward ESG best practice

To align financial reporting and procurement practices with ESG goals, Ahuja and Achampong recommend the following steps:

1. Adopt comprehensive ESG frameworks: Finance teams should leverage internationally recognised frameworks, such as the ISSB standards, to ensure consistent and transparent ESG reporting. This helps build credibility with investors and stakeholders.
2. Adopt relevant learning strategies: As ESG is an evolving discipline, professionals must continuously enhance their knowledge and skills. Organisations should invest in education and training to equip teams with the expertise required to navigate ESG complexities. Recognising this need, ACCA has launched the Professional Diploma in Sustainability to help finance professionals develop essential sustainability competencies.
3. Develop an ethical procurement strategy: Procurement functions should implement policies that prioritise sustainability and ethics. This includes sourcing from suppliers who meet rigorous environmental and social criteria, conducting regular audits and ensuring transparency across the supply chain.
4. Enhance collaboration across functions: Breaking down silos between finance and procurement teams is essential. Joint training sessions and cross-functional task forces can foster collaboration and ensure alignment on ESG goals.
5. Leverage technology: Digital tools can play a significant role in tracking and reporting ESG performance. From blockchain for supply chain transparency to AI-driven analytics for risk assessment, technology enables organisations to make data-driven decisions.
6. Engage stakeholders: Engaging employees, suppliers and customers in sustainability initiatives can create a culture of accountability and drive collective action toward shared goals.
7. Quantify long-term benefits: Organisations should calculate the long-term financial and social returns of ESG investments. For example, studies show that energy-efficient buildings can reduce operational costs by up to 30%, while ethical sourcing practices can mitigate reputational risks.

Achieving thorough ESG goals requires concerted efforts from finance and procurement professionals. Ahuja concludes: “The finance function holds the key to directing investments toward impactful projects, while procurement ensures these investments are executed sustainably. Together, they can drive meaningful change.”

Achampong echoes this sentiment, stating: “By embracing ethical and sustainable practices, businesses in the Middle East can not only meet regulatory requirements but also position themselves as global leaders in ESG.”

Through collaboration and a firm commitment to embedding ESG principles into core business strategies, finance and procurement teams have the power to drive tangible and lasting change. By aligning investments with sustainability objectives and ensuring ethical practices across supply chains, they can mitigate climate risks, foster economic resilience, and enhance social equity.