ValueCo and Instinctif Partners’ whitepaper sheds light on MENA ESG dynamics and institutional investor sentiment

  • Perspective of asset allocators, MENA underperforms with average ratings below 50%
  • MENA governance scores fall below global peers
  • Distinctive ESG profiles revealed – UAE leads with average investor score of 39.5%
  • Time for MENA issuers to adopt robust ESG frameworks to address international investor concerns

DUBAI, UAE, Dec. 6, 2023 /PRNewswire/ — Environmental, Social, and Governance (ESG) considerations have taken center stage, and the MENA region is a focal point. A co-authored whitepaper by ValueCo (France) and Instinctif Partners (MENA), titled “Navigating ESG Integration: Assessing the Extra-Financial Landscape of Listed Companies in the MENA Region,” unveils insights that promise greater transparency and comprehension of key value drivers concerning ESG factors, as the region progresses in its integration of ESG into business decision making.

ValueCo and Instinctif Partners’ whitepaper sheds light on MENA ESG dynamics and institutional investor sentiment

Mathieu Joubrel, Co- Founder and CTO at ValueCo’s commented:

“Our proprietary tool underpinned by data gathered from asset managers contributing to our ESG collective intelligence model, illustrates the transformative path toward sustainable business practices that the MENA region is undergoing. In the lens of asset allocators, the region still underperforms compared to global peers, with MENA average ratings falling below the 50% mark. Our analysis shows that while some markets and sectors in the region perform well in Environmental and Social pillars, Governance issues persist, with international investors consistently assigning lower scores to MENA issuers.”

The whitepaper emphasizes that Governance scores in the MENA region consistently fall below global peers, revealing formidable obstacles. Cultural and workforce alignment issues are identified as barriers to meeting governance standards, despite policy makers making significant strides to enact more stringent governance regulations.

At the country level, the whitepaper unveils distinctive ESG profiles. The UAE leads with an average investor score of 39.5%, followed by Turkey and Oman. These scores are attributed to high performance in environmental and social aspects, supported by a regulatory environment requiring issuers to disclose their ESG performance.

Diana Estupinan, Chief Client Officer and ESG Advisor at Instinctif Partners MENA added:

“Qualitative feedback from investors showcased in our analysis indicates a paradigm shift in the importance of ESG. While ESG continues to grow in importance as a trigger for investment decisions by institutional investors, MENA issuers have a valuable window to adapt robust frameworks, and address core concerns raised by investors at a geographic and sector level. Issuers can continue to work robust ESG frameworks and ensure they continue to adopt best practice reporting to make information available to asset managers for their strategic decision making.”

Samantha Bartel, Managing Partner and CEO at Instinctif Partners MENA commented:

“In light of the insights from our co-authored whitepaper on MENA ESG dynamics, there is a clear imperative for improved ESG adoption in the region. With average ratings and governance scores trailing global peers, there exists a significant opportunity for issuers to enhance IR and ESG practices. We remain committed to guiding MENA issuers in adopting robust ESG frameworks and best practice reporting standards. This journey towards sustainable business practices is crucial, and we eagerly anticipate playing a key role in transforming the region’s ESG landscape for the better.”

In evaluating ESG performance across 11 sectors, the paper identifies a nuanced landscape. Information Technology and Communication Services lead the way, while Real Estate grapples with challenges, consistently ranking among the lowest-performing sectors.

The MENA region’s journey toward enhanced ESG performance faces a number of challenges and opportunities, unfolding in the wake of historical legacies. The whitepaper anticipates a transformative stride, where proactive measures, comprehensive regulations, and universal standards will pave the way for a sustainable and resilient future.

About ValueCo

ValueCo is a mission-driven company that aims to explicitly integrate environmental, social and human criteria into company performance and market valuations.

ValueCo has developed the first SaaS ESG analysis solution based on the proprietary scores of professional investors. They are the only player to collect and leverage the internal opinions of asset managers, thanks to their collaborative model and their cutting-edge research, conducted in-house and with academic partners.

This model enables them to draw on the collective intelligence of responsible investors to improve market practices as a whole.

About Instinctif Partners

Instinctif Partners is a leading international business communications consultancy with expertise across diverse practice areas: capital markets, corporate, public policy, content creative and insight & research. It is a specialist in reputation and influence, with experience across numerous sectors. It works with clients across multiple and complex audiences combining deep insights, expert storytelling and creative delivery to change behaviours, emotions and  perceptions. Instinctif Partners currently employs over 320 people in 12 offices across Europe, the Middle East, and Africa.

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