Introduction
The United Arab Emirates (UAE) continues to position itself as a global leader in climate action, sustainability and energy transition. Following COP28 and the nation’s Net Zero 2050 commitment, the regulatory landscape has rapidly evolved to translate ambition into enforceable compliance requirements.
The Federal DecreeLaw No. 11 of 2024 on the Reduction of Climate Change Effects (“Climate Change Law”), effective 30 May 2025, with a compliance deadline of 30 May 2026, was issued in 2024. The law requires inscope entities (“sources”) to measure, report and reduce greenhousegas (GHG) emissions in accordance with methodologies and forms issued by the Ministry of Climate Change and Environment (MOCCAE).
This article summarises the practical steps businesses can take to comply with the UAE Climate Change Law.
Determine applicability
The Climate Change Law applies broadly to public and private entities across the UAE, including free zones. Businesses must first determine:
- Whether they fall within the definition of a “source” or in scope entities
- The corresponding reporting, verification and registry requirements.
This assessment determines administrative and reporting obligations.
Establish strong governance
Successful compliance requires organisationwide alignment and buy-in. Some of the initial actions we recommend are as follows:
- Assign an accountable executive owner
- Form a crossfunctional working group (Sustainability/ESG, environment, health and safety (EHS), operations, finance, procurement, legal, compliance, audit, risk management)
- Develop a climatechange or environmental management policy
- Roll out awareness and training on climate risks, compliance obligations and evidence requirements.
A clear ownership model prevents fragmented data, unclear responsibilities, and noncompliance. Climate governance can also align with internal controls and compliance frameworks, particularly where climate oversight intersects with regulatory and board governance structures.
Define organisational and operational boundaries
Boundary decisions influence the scope, accuracy and credibility of your GHG inventory, which is a critical reporting element of the Climate Change Law. Businesses should:
- Define the consolidation approach (equity share vs. control)
- Identify all Scope 1 and 2 emission sources
- Map where Scope 3 data may be needed later as stakeholder expectations evolve
- Document boundary decisions and exclusions with rationale.
Ambiguous or undocumented boundaries are among the most common verification issues.
Build a robust GHG accounting framework
Businesses should develop a defensible GHG inventory supported by a robust GHG accounting framework, which can include:
- Comprehensive data mapping (fuel, electricity, refrigerants, fleet, generators, process emissions, etc.)
- Traceable activity data tied to invoices, meter logs and system extracts
- Consistent emission factors and methodologies, clearly documented
- Qualityassurance controls, reconciliations, reasonableness checks and change logs
- An evidence pack prepared with verification in mind
Implementing GHG accounting is not just about compliance - it’s about unlocking business value. The benefits go beyond sustainability and directly impact costs, risk management and brand reputation.
Manage climate risk mitigation plans
The Law empowers sector authorities to introduce sectorspecific climate standards, reduction targets or transition pathways. Businesses can be proactive by preparing for the following:
- Energyefficiency initiatives
- Renewableenergy adoption targets
- Restrictions or phased reduction of highemitting processes
- Incentives to adopt lowemission technologies.
Compliance will therefore evolve as additional cabinet resolutions and sector guidance are issued. Businesses must proactively monitor these updates and integrate them into emission reduction plans.
Set emissionsreduction targets roadmap
Beyond reporting, the Climate Change Law expects businesses to actively reduce emissions through energy efficiency, renewables, carbon capture, utilisation and storage (CCUS), naturebased solutions and carbon credits. Some practical steps to implement can include:
- Establish a baseline emissions profile
- Set interim and longterm reduction targets
- Identify abatement levers (cost, feasibility, timeline)
- Link targets to operational and capital investment processes
- Track performance through dashboards and governance reviews
A reduction roadmap makes regulatory compliance part of operational and financial planning—not an endofyear exercise.
Invest in data infrastructure
One of the Climate Change Law’s objectives is to have reliable data to enable monitoring – this requires data integrity. Businesses should standardise data definitions, implement GHG data platforms, integrate them with financial systems, and secure third-party assurance where necessary. Companies with robust systems and verified data are better positioned to report on their GHG emissions accurately.
Measurement, reporting and verification (MRV) requirements
The MOCCAE requires sources to measure emissions regularly, maintain documentation for five years, and submit reports using approved templates. With the National MRV System launched in 2025, UAE businesses must now build the internal capability, data discipline, and governance structures necessary for reporting. The Law outlines the following key compliance requirements for MVR:
- Measure emissions regularly, prepare an emissions inventory and maintain the records for a period of five (5) years minimum – this requires an effective data management system.
- Develop and implement strategies to reduce emissions
- Report to the MOCCAE data on emissions and emission reduction strategies (both current and future) and the expected results from the reduction.
- The MOCCAE or appointed verifier may request to verify the accuracy of emissions data; emission data should be complete and accurate to enable the MOCCAE to analyse emissions and related reduction strategies.
Conclusion
The UAE Climate Change Law marks a shift from voluntary sustainability initiatives to mandatory regulatory compliance, built on defensible data, governance alignment, and credible emissions-reduction pathways. Organisations that act early, by establishing climate governance, strengthening data infrastructure, and integrating climate risk into decision-making, will be better positioned to meet compliance deadlines, reduce operational risk and enhance stakeholder confidence.
As part of the global BDO Network, BDO UAE combines local regulatory insight with international sustainability expertise. Our teams support businesses as they navigate climate compliance, emissions reporting, MRV requirements and broader sustainability strategy implementation.
Author: Sidharth Nanda
Manager, ESG and Sustainability, BDO UAE
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