United Arab Emirates - Sustainability claims and greenwashing
What are the top three developments in the UAE concerning green claims and the associated risk of greenwashing?
The United Arab Emirates (the “UAE”) is committed to the UAE Net Zero by 2050 strategic initiative, which is a national drive to achieve net-zero emissions by 2050, and which would make the UAE the first nation in the Middle East and North Africa to achieve net zero-emissions.
The UAE Net Zero 2050 strategic initiative aligns with the Paris Agreement, which calls on countries to prepare long-term strategies to reduce greenhouse gas (“GHG”) emissions and limit the rise in global temperature to 1.5°C compared to pre-industrial levels.
The deployment and use of clean energy solutions is one of the main pillars of the UAE’s model for addressing the challenge of climate change and reducing GHG emissions. The UAE Energy Strategy 2050 aims to convert 50% of its energy to renewable sources and reduce its carbon footprint by 70% by 2050.
Greenwashing guidance
In the UAE, there are no specific rules or guides on “green marketing”; however, there are strict advertising rules in place. All advertisements (both offline and online) must comply with the National Media Council’s (“NMC”) Advertising Guide issued in 2018, as well as the content standards issued under NMC’s Cabinet Resolution Concerning Media Content No. 23 of 2017, which clarifies the standards set out under Federal Law No. 15 of 1980 Regarding Printed Matters and Publications (“PPL”).
Under the PPL regulations, advertisements should not include or contain false or misleading claims which are intended to exaggerate, claim exclusiveness, denigrate competitors or involve fraud and deception. The advertisement should be real and unexaggerated and must not create any confusion by any means with any other brand names, products or activities.
Separately, under Article 17 of the new Consumer Protection Law (Federal Law No. 15 of 2020 on Consumer Protection), an advertiser is prohibited from describing a commodity or service in a manner containing false data or from advertising the commodity or service in a misleading way. This includes labels, packaging, prices and promotions.
There is also scope for the anti-commercial fraud legislation (i.e. Federal Ministerial Decree No. 26 of 1984) to be applicable, as it prohibits traders from declaring false information on goods or any awards or ranks concerning the origin, description or importance of goods. In the absence of specific “green marketing” rules, these advertising, consumer and anti-fraud rules should be followed.
We have identified the following top three developments concerning green claims in the UAE.
1. The rise of “sustainable cities”
Due to the extreme climate conditions and vast resource consumption in the UAE, there is a new type of city cropping up. Meticulously and expensively designed “sustainable cities” are claimed to be models for green development and examples of how, in an inhospitable environment, humans can live with minimal impact on the earth. However, these cities have been criticised for inflating claims of “sustainability”.
As a result of massive energy and water consumption in the UAE, sustainability (referring to economic development with minimal degradation of natural resources) has become a significant pillar of growth plans.
Masdar City was the first sustainable city project created as part of the government’s effort to mitigate the impacts of climate change. Initiated in 2006 on the outskirts of Abu Dhabi, Masdar was intended to be the world’s first carbon-neutral planned city. Other features of Masdar’s original master plan provided for zero cars, an automated personal rapid transit system, and a new Masdar Institute for Science and Technology which offers degrees in sustainability-related fields. Initially planned to be fully operational by 2015, Masdar has pushed its completion date back to 2030. Various reports have questioned Masdar’s effectiveness as a sustainable city due to the delayed completion and inability to meet carbon-neutrality goals. Masdar City no longer aims to be carbon-neutral, but instead is promoting the development of technologies that reduce energy consumption and rely on more renewable sources.
Another “sustainable” development in the UAE is The Sustainable City in Dubai. This aptly-named development was the second major planned eco-city to take shape in the UAE. Critics have argued that these projects have been initiated by the state or by private sector developers and merchant families with the main aims being profit, selling real estate and generating income.
Both Masdar City and The Sustainable City are self-contained communities relatively far from their respective metropolises, raising questions for sustainability experts as to whether these communities are in isolation, and what purpose they actually serve.
2. Conscious consumerism is gaining strength
Consumers in the UAE are actively seeking products and services that align with their sustainability values. As frustration with the limited availability of sustainable alternatives grows, consumers have begun to reject and shun products and services that they do not consider to be sustainable.
According to a survey by Sustainability Advisory, a Dubai-based consultancy, an overwhelming majority of consumers find it either difficult or very difficult to live sustainably in the UAE. An example of such difficulties may be seen in transport in the UAE. Due to the hot climate, good road infrastructure, relatively low fuel costs (although fuel costs have risen in recent years) and the lack of fully-connected public transport, car travel is by far the most convenient and prevalent mode of transport in the UAE.
Conscious consumers in the UAE are also unequivocal in their opinion that businesses must do more to offer sustainable alternatives that are clearly and credibly labelled and advertised. 75% of the respondents to the Sustainability Advisory survey found it difficult to trust product and business claims about sustainability.
The survey results show a clear signal that consumers in the UAE want legislative and regulatory interventions and strict enforcement in sustainability-related matters that affect consumption. There is a powerful message for businesses too, as consumers not only want more alternatives but trustworthy and clear information backing up any sustainability claims.
One of the latest ESG developments is the ban on single-use plastic shopping bags in the UAE. The ban came into effect on 1 June 2022 in Abu Dhabi. In Dubai, a tariff on single-use bags came into effect on 1 July 2022. Developments like these highlight the UAE government’s willingness to listen to consumers and put sustainability interests above business interests.
3. Claims of Energy Efficiency Progress
Energy efficiency is another key factor on the UAE agenda in striving for sustainability, and remains critical due to population growth, economic activity, and high consumption rates that are unsustainable in the long-term. As such, the UAE has taken a number of steps to address this.
At a federal level, in July 2014, the Ministry of Energy and Infrastructure established a new department for energy conservation and energy efficiency, with one of the goals being to establish a database of energy consumption by different sectors across the UAE in order to compare the performance of establishments within a sector. The push for energy efficiency can be seen even further back in time when looking at the Emirates Authority for Standardization and Metrology promoting efficient electrical equipment. This has included the introduction of an efficiency-labelling scheme for window and split-unit A/C systems in 2012, and a ban on importing inefficient incandescent light bulbs from July 2014, the latter of which alone is expected to cut energy use by 500MW per year.
This federal scope can also be seen at a local level too, such as through the launch of the Dubai Integrated Energy Strategy 2030 to drive energy decarbonisation and ensure energy efficiency, and the Ras Al Khaimah Energy Efficiency and Renewables Strategy 2040 that sets out the long-term strategy of the emirate in the field of energy efficiency and renewable energy.
One of the key methods of instigating energy efficiency has been through buildings and architectural design. This can be exemplified by the HSBC tower, inaugurated in 2019, which is considered one of the most sustainable buildings in the world. The building received the coveted LEED Gold Standard from the Green Building Council as it uses 25% less energy and 40% less water in its housing of 3,000 employees. The building is not alone, with the UAE ranked 14th globally for the highest number of sustainable buildings, and the leading country in the region for the highest concentration of sustainable buildings.
However, concerns remain over the retrofitting of existing buildings. This could lead to energy inefficiency management for decades to come, and remains one of the most cost-efficient methods of combatting climate change.
Further, the very nature of cutting-edge building design is a double-edged sword. Whilst the focus on energy efficiency – particularly in relation to buildings – appears to be positive progress, it could very well instead be framed as a necessity rather than a “nice step in the right direction”. Concerns have been raised since the early 2000s whereby it was suggested that the issue of high consumption and energy in office tower buildings in the UAE and its adverse impact on the environment “is alarming and must be considered by decision makers in any future planning.” 12 years later, a 2016 report set out that 80% of energy in the UAE was consumed by buildings.
The desire for “signature buildings” arguably counteracts the striving for energy efficiency as it can lead to factors such as leaky buildings and poor energy use. The nature of these unique, tall buildings and skyscrapers, in addition to the surrounding environment requiring significant amounts of temperature cooling, leads to a number of “energy-insensitive scenarios”. The UAE has accordingly been dubbed by some as the “bad boys of energy consumption”.
The motive behind promoting energy efficiency is brought into question by the seemingly heavy focus on economic factors rather than reference to environmental factors. As much as there is an indication of a desire to reduce emissions, this is followed in equal measure by highlighting the benefits of a green economy capable of creating new jobs, the desire to achieve global economic competitiveness, and the rising prices of conventional energy sources. By way of example of this economic influence on energy efficiency; despite the introduction of a consumption tariff and a slab tariff system, low consumption costs remain in competition with these and present an obstacle to developing further efficiencies. With a focus on future economic factors and extravagant new buildings, there is a risk that this compounds the existing issue of old, inefficient, buildings being left behind which could be fundamental to delivering on energy efficiency. Ultimately, rather than a genuine desire to appease its climate impact, it could be this very monetary saving that ends up facilitating the energy efficiency across the UAE.
