Rethinking Climate Strategy Under UAE's New Law

From voluntary pledges to legally-binding obligations for all public and private entities, the UAE’s Federal Decree‑Law No. 11 of 2024 marks a major milestone addressing climate change. Effective May 30, 2025, under the law, companies must measure, report, and manage greenhouse emissions using Ministry‑approved methods, and store data within a national emissions inventory. The Library of Congress states that the legislation is the first in the Middle East and North Africa region that establishes a legally-binding climate action framework aligned with Net-Zero 2050 goals under the Paris Agreement.

What This Means for Businesses

With climate reporting no longer being optional, according to Decree 11 non‑compliance can trigger fines from AED 50,000 to AED 2 million, with repeat offenders facing doubled penalties and potential license suspensions. The law also demands climate risk assessments and adaptation planning, making climate strategy a core business requirement.

Risk or Opportunity? Both

Non-compliance with UAE’s climate laws can lead to penalties, trade restrictions, and reputational damage. But businesses that act early can gain investor trust, stand out in the market, and unlock access to carbon credit programs. With UAE’s upcoming carbon registry and MRV system, companies can also tap into global carbon markets under Article 6 of the Paris Agreement.

Photo by Amir Hanna on Unsplash

A Call for Proactive Strategy

For businesses navigating UAE’s evolving climate compliance landscape, the path forward begins with a proactive mindset. The first essential step is to conduct a comprehensive climate readiness audit, assessing current reporting capabilities, identifying emissions hotspots, and uncovering data and process gaps. This lays the foundation for designing robust emissions monitoring infrastructure, covering Scope 1, 2, and increasingly, Scope 3.

Once gaps are clear, the focus must shift to implementation. Deploying digital tools that can automatically collect, validate, and structure emissions data is no longer optional, it’s the only way to ensure accuracy, audit-readiness, and timely compliance. Manual, spreadsheet-based reporting simply won’t meet the rigor of laws like UAE’s Decree 11 or international frameworks like CBAM or BRSR.

Finally, no decarbonization plan can succeed in isolation. Engaging key stakeholders from internal leadership to supply chain vendors and regulatory bodies, is vital. This ensures everyone is aligned on goals, timelines, and roles in execution. Early action doesn’t just reduce risk, it positions your business to lead in a market where climate accountability is fast becoming a competitive advantage.

Why This Matters Now?

With Decree 11’s compliance deadline looming, now is the time to move beyond reporting checklists and embed climate strategy into operations. Those who act now will not only avoid penalties, they’ll shape the UAE’s future-ready economy and secure long-term value in a climate-conscious world.

Citations
Library of Congress: United Arab Emirates: Climate Law Takes Effect, Supplementing National Emissions Strategy | Library of Congress