The journey to a sustainable future

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In an era where sustainability is no longer a mere buzzword but a critical business imperative, Grant Thornton research reveals a notable shift in investment priorities among Egyptian business leaders. As we move further into 2024, a significant 29% of business leaders are poised to increase their investment in sustainable initiatives over the next 12 months, up from 27% in the first quarter of 2024.

This upward trend underscores the growing recognition of sustainability as a key driver of long-term business success and resilience. The data indicates that the lion’s share of investment is going toward initiatives that mitigate companies’ environmental footprint, which aligns directly with the wider national directive.

A strategic shift among Egyptian business leaders

International business

of business leaders believe ESG requirements are a barrier to international business expansion

Investing in sustainability

of business leaders are increasing their investment in sustainable initiatives

Where to start

of business leaders cite not knowing where to start when it comes to ESG compliance as their biggest concern

Factors driving Egyptian businesses to invest in sustainability

Market Competition and Brand Reputation

The two most important factors cited by business leaders are pressure from market competition and the need to maintain a strong brand reputation. In an increasingly competitive market, businesses are recognizing that robust ESG practices can serve as a key differentiator.

Political and Societal Pressure

Regulatory bodies are implementing policies to promote sustainable practices and linking access to capital with the same. At the same time, there is a growing expectation from customers, employees, and communities, to act responsibly. Companies are responding to these pressures by integrating sustainability into their core values and operations, thereby fostering trust among stakeholders.

Sustainability momentum in Egypt

The data highlighted a growing awareness of sustainable development practices among Egyptian business leaders. While a significant portion of businesses have yet to embark on their sustainability journey, the adoption of ESG strategies, targets, and reporting by others sets a promising foundation for future growth.

A solid 30% of Egyptian businesses have an ESG strategy in place and 20% have set targets to measure the strategy up against the medium to long term. Some 17% of respondents have implemented their sustainability program and 13% engage in reporting – a new and yet growing requirement for EGX-listed companies.

Plotting a course

From our research and the IBR data, we have produced a proposed model for a ‘sustainability cycle’ which depicts the phases most mid-market firms will go through on the journey to becoming a sustainable business. The cycle is comprised of four phases, each encompassing different actions on sustainability. From the data we can also determine that the cycle is continuous and iterative.

Our analysis shows that firms undertake many different combinations of actions on sustainability. Each cycle through the phases fuels subsequent ones, and as time goes on, a complex and interconnected journey forms. It’s therefore helpful to picture the sustainability journey as a continuum.