New CBB rules spur firms to adopt sustainable practices

With the Central Bank of Bahrain (CBB) mandating ESG (Environmental, Social, and Governance) reporting for licensees and listed companies by 2025, businesses across the GCC are accelerating their adoption of sustainable practices.

This move underscores the region's broader commitment to aligning corporate strategies with national visions like Economic Vision 2030, Saudi Arabia's Vision 2030, and the UAE’s Net Zero 2050 commitment.

The CBB's new regulations aim to boost transparency, enhance corporate governance, and achieve social and climate-related objectives. This development comes as sustainability becomes a cornerstone of corporate strategy in the GCC, with businesses embracing initiatives focused on energy diversification, circular economy principles, sustainable infrastructure, and water conservation, all while adhering to global sustainability reporting standards.

"Sustainability is no longer a choice, it's a business imperative," says Grant Thornton Bahrain managing partner Jassim Abdulaal. "Companies in Bahrain and across the GCC are recognizing that embedding ESG principles into their operations drives innovation, builds trust, and creates long-term value. At Grant Thornton, we are proud to support organizations on this journey, helping them align with both local regulations and global standards while unlocking opportunities for growth."

The transition, however, presents challenges.

"Transitioning to a sustainable model requires substantial investment and a shift in mindset, which can be daunting for many businesses," notes Grant Thornton Bahrain Senior Partner Jatin Karia. "The high cost of adopting renewable energy, implementing eco-friendly technologies, and ensuring compliance with evolving regulatory frameworks are significant hurdles. Companies need tailored strategies to manage these challenges effectively while staying competitive."

Sunil Thakkar, Business Risk Services Partner at Grant Thornton Bahrain, emphasizes the importance of strategies for sustainability: "Conducting a robust materiality assessment is a crucial step for companies striving to align with CBB ESG requirements. While many organizations approach it as a compliance exercise, it holds far greater potential. A well-executed materiality assessment helps identify critical risks and opportunities, providing valuable insights to build a resilient and sustainable business model. At Grant Thornton, we guide businesses through this process, ensuring it adds value by increasing stakeholder engagement and driving long-term growth."

Grant Thornton offers comprehensive support to businesses navigating this evolving landscape, from baseline assessments and sustainability strategy development to conducting materiality assessments and ESG training for board members.

"Boards must lead from the top to ensure sustainability strategies are integrated into core business operations," Mr Karia adds. "By proactively engaging with materiality assessments, companies can transform ESG compliance from a regulatory requirement into a catalyst for innovation and value creation."