How UAE-listed and ADGM-regulated companies can meet mandatory esg reporting requirements uae disclosure rules across three different regulators, within the right timelines, without conflating the frameworks.

✓ Written by Prima Consulting’s advisory team  ·  ✓ Serving GCC, Europe & APAC  ·  ✓ Actuaries + CPAs + CFAs

TL;DR

ESG reporting requirements UAE now apply to most listed and ADGM-regulated companies, but the rules are not the same across DFM, ADX, and ADGM. This article covers who must report and when, which frameworks (GRI, TCFD, IFRS S1/S2) each regulator expects, and how the new Federal Climate Law adds a parallel GHG obligation that sits on top of exchange rules. You’ll also get a practical four-step implementation roadmap covering materiality assessment, Scope 1 and 2 baselines, board governance, and framework selection. If your team is still treating ESG as an annual formatting exercise, read on.

What UAE Companies Actually Face Right Now

When Federal Decree-Law No. 11 of 2024 took effect on 30 May 2025, every company operating in the UAE, including those in free zones, became legally obligated to measure and report greenhouse gas emissions. Fines for non-compliance run from AED 50,000 to AED 2,000,000 per violation, and PwC’s analysis of the Climate Law confirms repeat offences within two years double those penalties to AED 4,000,000. That happened alongside, not instead of, existing exchange-level ESG reporting obligations on DFM and ADX.

So if you’re reading this trying to figure out what exactly your company is required to do, you’re dealing with at least two separate regulatory tracks that often get lumped into one conversation. That conflation is where most compliance gaps come from.

What this article covers:

• The specific ESG reporting requirements UAE under DFM, ADX, and ADGM, with frameworks and timelines
• What IFRS S1 and S2 mean for UAE companies right now, and whether they’re actually mandatory
• The four practical steps to get your ESG reporting programme in order before your next reporting cycle

Prima Consulting’s ESG consulting team works with listed companies across DFM and ADX. The confusion between exchange requirements and the Climate Law comes up in almost every initial scoping call.

Who Must Report? A Plain-English Breakdown by Exchange

The biggest source of confusion in this space is treating DFM, ADX, and ADGM as roughly equivalent. They’re not. Each has its own framework alignment, reporting timeline, and enforcement posture. Getting that wrong creates either unnecessary work or real compliance exposure.

DFM ESG Requirements: What Listed Companies Must Disclose

The Dubai Financial Market’s ESG Reporting Guide requires all listed public joint stock companies (PJSCs) to submit an annual sustainability report. That report must be filed within 90 days of the financial year-end, or before the AGM, whichever comes first. The DFM requires alignment with GRI Standards and asks for 31 or more sector-tailored KPIs, covering environmental, social, governance, and economic dimensions.

What that means in practice: an energy company reports on emissions intensity relative to output, while a bank covers workforce diversity and ethical lending practices. The KPIs are not one-size-fits-all. You can’t drop a generic template into the DFM disclosure and call it done.

DFM also references ISSB (IFRS S1 and S2) in its guidance and expects companies to cover Scope 1, Scope 2, and where material, Scope 3 emissions. The DFM was one of the first regional exchanges to make sustainability reporting mandatory. That happened years before the Federal Climate Law arrived.

ADX Sustainability Reporting: What’s Changed for 2026

ADX has over 170 listed firms with a combined market cap exceeding AED 3 trillion, and the majority have been publishing assured sustainability reports since 2

020. If you’re listed on ADX and not publishing an assured report, you’re behind the curve. And that gap is getting noticed by institutional investors.

One thing worth flagging here, and I’d want to be honest about this: the ADX’s enforcement of sustainability reporting quality is still developing. Some companies file reports that technically satisfy the form requirement but provide very little that’s actually useful to investors. That may not stay a safe position as ISSB alignment becomes the global baseline.

ADGM ESG Disclosure: The Comply-or-Explain Tier

The Abu Dhabi Global Market operates differently. Its ESG Disclosures Framework applies a “comply or explain” model rather than hard mandates. But that doesn’t mean it’s optional.

The framework kicks in for companies that cross one of two thresholds: annual turnover above US$68 million, or FSRA-regulated asset managers with assets under management above US$6 billion. These companies must file ESG disclosures alongside their annual accounts via the ADGM’s Online Reporting System (ORS) beginning from year three after incorporation. ADGM explicitly references TCFD, SASB, and GRI as acceptable frameworks and expects companies to state which they’ve followed and where they’ve deviated.

“Comply or explain” is often read as a softer obligation. It isn’t. Regulators and institutional investors read the explanations. A pattern of explaining non-compliance year after year signals risk, not flexibility.

If you’re trying to assess which tier applies to your business before your next reporting cycle, Prima Consulting’s ESG consulting firms page covers how we structure scoping engagements for companies across all three regulators.

DFM vs ADX vs ADGM: Side-by-Side Comparison

That last row is where companies get caught off guard. The Federal Climate Law doesn’t care whether you’re listed or not. It applies to all entities in the UAE, including those operating in free zones.

IFRS S1 and S2 in the UAE: Voluntary Now, But for How Long?

Here’s the question that comes up in every ESG advisory engagement: are IFRS S1 and S2 mandatory in the UAE?

The short answer right now is no. Not formally. The UAE has not issued a government decree requiring IFRS S1 or S2 adoption, unlike Brazil (mandatory from 2026) or Nigeria (already mandatory). But that framing misses what’s actually happening.

KPMG’s June 2025 “Two Years In” report on ISSB standard adoption notes that UAE listed entities are showing strong momentum in aligning with these global standards, and that over 30 jurisdictions representing more than half of global GDP have already moved toward adoption. The DFM and ADX guidance documents both reference ISSB and its frameworks directly. The direction is clear.

So what are IFRS S1 and S2? IFRS S1 sets general requirements for sustainability-related financial disclosures. Think of it as the overarching framework that covers governance, strategy, risk management, and metrics across all sustainability topics. IFRS S2 focuses specifically on climate, building directly on TCFD and effectively replacing it as the climate disclosure standard of choice for investor-facing reports.

If you’re a DFM or ADX-listed company already reporting under TCFD, your IFRS S2 transition will be relatively straightforward. The architecture is similar. The investor community is already asking for ISSB-aligned disclosures from regional companies, and ESG metrics increasingly affect capital allocation decisions. That pressure doesn’t wait for a formal mandate.

My honest read: companies that start building toward full IFRS S1 and S2 alignment now will have a material advantage when the UAE formalises adoption, which the region’s trajectory suggests is a matter of when, not if.

Prima Consulting has worked with listed clients across the UAE and GCC on ESG reporting across the Middle East, including companies managing the shift from TCFD-based reports to ISSB-aligned disclosures. The consistency of investor questions on IFRS S1/S2 preparedness has become hard to ignore.

The Federal Climate Law That Most Boards Haven’t Fully Mapped

This is where things get complicated for companies that have been treating ESG purely as a capital markets obligation.

Federal Decree-Law No. 11 of 2024 on the Reduction of Climate Change Effects came into force on 30 May 2025. Full compliance is required by 30 May 2026. And unlike the SCA sustainability reporting rules, which apply only to listed PJSCs, this law covers every entity in the UAE, regardless of size, sector, or listing status. Free zone companies are included. Government-linked entities are included. There’s no minimum revenue threshold, unlike corporate tax.

What does it actually require? Three things:

• Measurement of Scope 1 and Scope 2 GHG emissions using approved methodologies (Scope 3 is recommended but not yet legally mandated; that’s expected to change around 2027)
• Reporting via MOCCAE’s National MRV Transparency System at mrv.ae
• Submission of existing and planned emissions reduction measures aligned with the UAE’s nationally determined targets, which call for a 47% reduction in emissions by 2035 compared to 2019 levels

Non-compliance carries fines from AED 50,000 to AED 2,000,000 for a first violation. Repeated violations within two years double those penalties to AED 4,000,000. Beyond the fines, companies found non-compliant face potential trade licence suspension and exclusion from UAE government procurement. For businesses that bid on ADNOC contracts, Dubai Municipality tenders, or federal authority work, that second consequence is the more serious one.

What I haven’t seen resolved cleanly yet: how MOCCAE will handle the verification requirements for smaller entities that lack the data infrastructure to produce credible Scope 1 and 2 inventories. The law sets the obligation. The operational reality for a 50-person ADGM-registered advisory firm is quite different from ADNOC. I’d expect phased enforcement, but I wouldn’t count on it.

Four Steps to Get Your ESG Reporting Right Before the Deadline

ESG reporting is not one project. It’s four parallel workstreams that need to be sequenced correctly. Most companies fail here not because they don’t care, but because they start with the report before they’ve built the data infrastructure. That’s backwards.

Step 1: Run a Materiality Assessment First

An ESG materiality assessment identifies which environmental, social, and governance topics matter most to your business and your stakeholders. DFM and ADX both reference materiality as the basis for KPI selection. ADGM expects it too.

The right way to do this: engage investors, employees, regulators, customers, and community stakeholders. Map the topics they raise against your business activities. Then rank them by the scale of impact, both the business’s impact on the world and the world’s impact on the business. GRI calls this “double materiality.” IFRS S2 focuses on “financial materiality,” meaning the climate risks and opportunities that affect enterprise value. Know which lens your regulator expects before you start.

A proper materiality assessment takes four to six weeks. Companies that skip it end up disclosing on dozens of topics that aren’t material and missing two or three that are. That’s the kind of report that gets flagged by ESG data providers and institutional investors.

Step 2: Build Your Emissions Baseline (Scope 1, 2, and 3)

You cannot report on emissions you haven’t measured. That sounds obvious. And yet a surprisingly large number of DFM-listed companies include emissions sections in their sustainability reports with figures that are clearly estimated rather than measured, sometimes without disclosing that fact.

Scope 1 emissions are direct: fuel combustion, company vehicles, fugitive emissions from air conditioning systems. Scope 2 emissions are from purchased electricity. Both are mandatory under the Federal Climate Law. Scope 3 covers the value chain, including supply chain, employee commuting, business travel, and product end-of-life. Scope 3 is recommended under DFM and ADX guidance but not yet legally required under the Climate Law, though that’s expected to change.

Build your baseline using the GHG Protocol methodology. It’s the global standard, it’s what MOCCAE’s MRV platform expects, and it aligns with what DFM, ADX, and ADGM reporting frameworks reference. Don’t invent a proprietary approach. Get your Scope 1 and 2 figures third-party verified before you file with MOCCAE.

Step 3: Set Up Board-Level ESG Governance

This is the section most boards read quickly and then move on from. Don’t. Governance structure is one of the most scrutinized elements in any ESG disclosure, and it’s where institutional investor analysis tends to start.

What DFM, ADX, and ADGM all expect: board-level accountability for ESG matters. In practice, that means a designated board committee with explicit ESG oversight, defined reporting lines to the CEO and CFO, and a clear process by which ESG risks are identified, escalated, and acted on. IFRS S2 is even more specific: it expects disclosure of whether the board is given ESG training, how often ESG is on the board agenda, and whether executive compensation is linked to sustainability targets.

If your ESG programme sits entirely in your communications or marketing function, that’s a governance flag. Not a fatal one, but a flag. The right home for ESG strategy ownership is somewhere in the CFO or risk function’s reporting line.

Step 4: Choose Your Framework and Write the Report

Only at this point do you write the report. Not before.

For DFM and ADX-listed companies, GRI Standards are the required foundation. Align your KPI selection with the DFM’s 31-metric guide, layer in TCFD disclosures for climate risk and strategy, and reference IFRS S1 and S2 where you can. For ADGM entities, TCFD, SASB, or GRI are all acceptable, though you need to state clearly which you’ve followed and explain any gaps.

One practical note: the comparison between your ESG report and the prior year matters more than most teams realise. Investors and analysts benchmark year-on-year progress. A first report that sets clear baselines is more valuable than a polished first report that doesn’t allow for meaningful comparison in year two. Start with honest baselines, not aspirational ones.

If you’re looking at this as a broader programme question, rather than a single reporting exercise, the ESG implementation guide on our site covers how to sequence these four workstreams across a 12-month engagement.

And here’s a question worth sitting with before you move forward: Does your board actually understand the difference between what DFM requires, what the Federal Climate Law requires, and what IFRS S2 expects? Most don’t. That gap between regulatory obligation and board-level understanding is where the real compliance risk lives. Not in the reporting form itself.

What You Now Know

• DFM and ADX-listed PJSCs face mandatory annual sustainability reporting under SCA rules, aligned with GRI and TCFD, filed within 90 days of financial year-end. ADGM applies a comply-or-explain model to companies above US$68 million in turnover or FSRA-regulated asset managers above US$6 billion in AUM.
• The Federal Climate Law (Federal Decree-Law No. 11 of 2024) sits on top of exchange requirements and applies to all UAE entities, including free zone companies, with a full compliance deadline of 30 May 2026 and penalties up to AED 2,000,000 per violation.
• IFRS S1 and S2 are not yet formally mandated in the UAE, but DFM and ADX guidance references them directly, and the global trend toward ISSB adoption means the question is when, not if. Companies that begin alignment now will avoid a rushed transition later.

ESG reporting requirements in the UAE have moved well past the voluntary phase. What DFM, ADX, and ADGM each require is different, and the Federal Climate Law adds a third layer that applies regardless of listing status. The companies that are in the best position right now are the ones that didn’t wait for each new mandate before building the data infrastructure, governance structure, and reporting process that underpins all of it.

The cost of getting this wrong isn’t just a fine. It’s exclusion from government procurement, lower access to institutional capital, and a sustainability report that signals to every investor running an ESG screen that your governance is not keeping pace. Given that 59% of businesses now expect poor ESG performers to be removed from supply chains, the commercial stakes have moved well beyond the regulatory ones.

If you’re assessing where your programme stands against what DFM, ADX, or ADGM actually requires today, that’s exactly the conversation Prima Consulting’s ESG advisory team is structured to have.

Frequently Asked Questions on ESG Reporting Requirements UAE

Is ESG reporting mandatory for UAE companies in 2026?

For listed PJSCs on DFM and ADX, yes. Annual sustainability reports aligned with GRI are mandatory under SCA rules. For ADGM entities above US$68 million in turnover, ESG disclosure operates on a comply-or-explain basis. The Federal Climate Law separately requires all UAE entities, including free zone companies, to measure and report GHG emissions by 30 May 2026.

What ESG framework do DFM and ADX listed companies need to follow?

Both exchanges require alignment with GRI Standards as the primary framework, covering 31 or more sector-specific KPIs. TCFD disclosures for climate risk are also expected. DFM and ADX guidance references ISSB (IFRS S1 and S2) as the emerging global baseline, though formal UAE-wide adoption has not yet been mandated.

What are the penalties for non-compliance with UAE ESG reporting rules?

Under the Federal Climate Law, non-compliance carries fines from AED 50,000 to AED 2,000,000 per violation, doubling to AED 4,000,000 for repeat offences within two years. Trade licence suspension and exclusion from UAE government procurement are additional consequences for serious or repeated violations.

Are IFRS S1 and S2 mandatory in the UAE?

Not yet as a formal regulatory mandate. But DFM and ADX guidance explicitly references ISSB standards, and leading UAE listed companies are already aligning with IFRS S1 and S2. Over 30 jurisdictions globally have moved toward adoption. UAE formal adoption is widely expected as the ISSB baseline becomes standard for investor-grade disclosure.

What is the ADGM ESG Disclosures Framework and who does it apply to?

The ADGM ESG Disclosures Framework applies to ADGM-registered companies with annual turnover above US$68 million, or FSRA-regulated asset managers with AUM above US$6 billion. It uses a comply-or-explain model, accepting TCFD, SASB, or GRI as frameworks. Disclosures are filed with annual accounts via the ADGM Online Reporting System.