By Sabrin Rahman Partner | Human Planet
In recent months, a growing number of CEOs in parts of Europe and the United States have distanced themselves from the language of ESG. Some have reframed commitments; others have quietly deprioritised them, including the US who have for the second time, exited from the Paris Agreement this month. The narrative is familiar: ESG is portrayed as politicised, overly complex, or misaligned with short‑term performance. To clarify, the criticism can be divided into three main strands: political pushback, which sees ESG as part of a contentious cultural debate; methodological doubts, where critics argue the metrics are overly sophisticated or unclear; and concerns of short-termism, where ESG is seen as conflicting with immediate financial goals. By distinguishing these facets, we reveal a multifaceted dialogue rather than a singular rejection.
From a Middle Eastern perspective, this backlash feels misplaced. Across the region, ESG is not treated as a values debate. It is treated as a risk management discipline, a capital allocation lens, and increasingly, a source of competitive advantage. A prime example of this is the Public Investment Fund (PIF) of Saudi Arabia’s strategic investment in renewable energy projects. The PIF has committed significant capital towards the development of NEOM, a city that aims to rely solely on clean energy. This flagship investment demonstrates the blend of foresight and early pragmatism in transitioning towards sustainable infrastructure, encapsulating the region’s approach to managing risk while seeking long-term economic benefits.
That distinction matters.
In my years in global banking, including at HSBC, ESG was never about virtue signalling. It was about understanding where risk was moving before it showed up on the balance sheet. Climate risk, transition risk, water stress, supply chain fragility, developing a social license to operate, and regulatory shifts are not abstract concepts; they directly affect asset values, cost of capital, and long‑term cash flows.
What is striking today is how clearly this framing has taken hold in the Middle East, even as parts of the West debate whether ESG has ‘gone too far’.
At Abu Dhabi Sustainability Week and the World Economic Forum in Davos this year, the language was notably pragmatic. Conversations focused less on ESG scores and more on resilience, transition finance, infrastructure, and national competitiveness. The question was not whether sustainability still mattered, but how quickly capital could be mobilised into the systems that underpin long‑term growth, including data infrastructure.
That theme was also in focus at Abu Dhabi Finance Week in late 2025. With more than half of the world’s capital providers reportedly in town, the discussions were not ideological; they were understandably commercial but with a nod to durability. Sovereign wealth funds, private capital, banks, insurers, and asset managers were aligned on one point: long‑term value creation requires anticipating systemic risk and investing ahead of it.
In that context, ESG is not a distraction from performance. It is a mechanism for protecting it. And thus what I’ve seen is that in the Middle East, ESG frameworks are increasingly being used to do three things well.
First, to manage downside risk. Climate exposure, water security, energy‑transition pathways, and workforce resilience are now material considerations in underwriting and investment decisions – and supported by key regulators such as the UAE’s Central Bank. Ignoring them does not reduce risk; it simply defers it.
Second, to unlock capital flows. Global capital, particularly institutional and long‑term capital, is still looking for credible transition stories. Markets that can demonstrate regulatory clarity, investable pipelines, and alignment between policy and capital are attracting capital at scale. The region’s leadership on blended finance, transition finance, and large‑scale infrastructure is not accidental; it is strategic.. There is still more to be done on the blended finance piece but momentum is picking up.
Third, to drive diversification. ESG‑aligned investments are helping accelerate new sectors across clean energy, climate technology, sustainable infrastructure, agri‑systems, health, and digital resilience. For economies seeking to move beyond hydrocarbons, this is not an ESG agenda; it is an economic one grounded in realities.
What I find most interesting is that many regional business leaders are not calling this ‘ESG’ at all. They are calling it future‑proofing (Al‑Saud, 2024). This shift in terminology is not just semantic; it reflects a strategic mindset that prioritises long-term resilience. By focusing on ‘future-proofing’, leaders emphasise proactive adaptation and readiness, which can resonate more strongly in decision-making psychology than the conventional ESG framework. This is where the current backlash perhaps misses the point. The question is not whether ESG needs rebranding. The question is whether businesses are genuinely stress-testing their models against a rapidly changing risk environment.
Long‑term value creation is no longer just about growth. It is about durability.
Companies that think critically about how climate, regulation, technology, demographics, and geopolitics intersect will be better positioned to withstand shocks, attract capital, and maintain relevance. Those that do not may still perform in the short term, but they are increasingly exposed to abrupt repricing.
There is also a soft‑power dimension that is often overlooked. Jurisdictions and companies that lead on credible transition pathways build trust with investors, partners, regulators, and communities. In an era of fragmentation and volatility, that trust is itself a strategic asset. Considering trust as an intangible asset can significantly enhance a company’s valuation. By converting trust into measurable balance sheet items, such as reduced discount rates reflecting perceived lower risk, or increased brand equity, companies can reinforce strategic value.
This article is the first in a series of reflections I will be sharing on long‑term value creation, resilience, and capital strategy. My aim is not to defend ESG as a label, but to challenge how narrowly we sometimes think about value.
In the Middle East, the conversation has already moved on. The focus is on resilience, relevance, and readiness for the next decade of capital flows. The question is if the rest of the world is paying attention to it or not.
