World Environment Day 2025: UAE’s Mandatory Climate Reporting as a Gateway to Sustainability

World Environment Day, observed globally on June 5th, is a pivotal moment for reflection and action towards environmental protection. This year, under the compelling theme of #BeatPlasticPollution, global efforts align seamlessly with the UAE’s introduction of mandatory climate reporting under Federal Law No. 11 of 2024. Effectively since May 30, 2025, this law signifies a critical step towards heightened corporate accountability and environmental stewardship.

The UAE’s new mandatory climate reporting requirements demand rigorous measurement of greenhouse gas (GHG) emissions, explicitly covering Scope 1 (direct emissions) and Scope 2 (indirect emissions from purchased energy). Select sectors are additionally obligated to account for Scope 3 emissions (indirect emissions from their supply chains and operations). Companies must adhere strictly to internationally recognized guidelines, such as ISO 14064 or the IPCC standards, and provide third-party verification of their reports. These verified reports will then be submitted to a national GHG registry, reinforcing transparency and accountability.

Non-compliance with these mandates carries hefty penalties, including fines of up to AED 2 million. However, businesses are granted a grace period until May 2026 to fully adjust and align their practices to these stringent reporting standards.

Companies in the UAE should begin strategic preparations immediately to ensure compliance and to leverage this opportunity for environmental and corporate advancement:

• Build Accurate Emissions Inventories: Initiate comprehensive data collection across operations, engaging cross-functional teams to ensure complete and accurate reporting of Scope 1 and 2 emissions.
• Implement Mitigation Strategies: Transition to renewable energy sources, improve energy efficiency practices, and explore carbon capture and storage technologies.
• Conduct Climate Risk Assessments: Map out both physical and transition risks, such as disruptions from extreme weather or regulatory changes, to build resilient business models

Linking Climate Action with Plastic Pollution Reduction:

The 2025 World Environment Day theme underscores the interconnectedness of global environmental challenges. The UAE’s mandatory reporting aligns closely with national policies, including the 2024 ban on single-use plastic bags and the planned 2026 phase-out of other single-use plastics. Businesses can capitalize on policy synergies by optimizing practices that concurrently reduce emissions and plastic waste.

Key actionable steps for businesses include:

• Plastic Use Auditing: Conduct assessments to align waste reduction initiatives with emissions tracking, enhancing overall sustainability metrics.
• Leveraging Carbon Credits: Invest in carbon credit projects such as mangrove restoration, which serve as natural carbon sinks and simultaneously mitigate marine plastic pollution.

A Unified Path to Sustainable Growth:

The UAE’s climate reporting mandate and World Environment Day’s global call to action against plastic pollution reinforce the necessity of a systemic approach to sustainability. Companies that proactively integrate environmental accountability into their business models will find themselves positioned not only for compliance but also for leadership and innovation in a rapidly evolving global market.

As we mark World Environment Day, it becomes clear that tackling climate change and plastic pollution together can unlock significant opportunities. UAE businesses now have the chance to pioneer sustainable practices, drive innovation, and ultimately support the country’s ambitious Net Zero 2050 vision, transforming obligations into long-term growth and environmental resilience.