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Corporate citizenship, Economy

At the end of March, Saudi Crown Prince Mohammad bin Salman unveiled the Saudi Green Initiative, a plan that includes a number of ambitious projects to reduce the country’s carbon emissions by 60%. Some headline-grabbing projects include planting 50 billion trees, 10 billion of which in Saudi Arabia, preservation of coral reefs, and a large boost to alternative energy sources.

Saudi Arabia claims the project would be the largest afforestation project in world history. To pair with the Saudi initiative, MBS also announced a Middle East Green Initiative targeting regional collaboration.

The announcement comes ahead of several key climate conferences including the Leader’s Climate Summit on 22-23 April and the United Nations Climate Change Conference (COP26) from 1 to 12 November.

Saudi Arabia and the Middle East region broadly stand to be greatly impacted by the forces of climate change. Warming temperatures will lead to drastic effects on Saudi Arabia’s ecology, deepening water scarcity, endangering biodiversity, and severely damaging the nation’s agricultural industry.

The Saudi Arabian economy has profited immensely from the growth in the fossil fuel industry, putting the nation in an awkward position when it comes to climate change. A significant number of scientists argue mankind needs to keep a majority of fossil fuels in the ground to stave off the worst impacts of climate change.

As one of the world’s largest oil producers in the world, climate activists may be sceptical of Saudi Arabia’s recent announcement, but regional stability and the country’s liveability are on the line. The Kingdom has also been known for its big promises related to infrastructure projects, which some critics have called vanity projects.

Currently, pressure is growing on state institutions to act on climate change, and it will continue to be one of the dominant issues on the global stage. More than just domestic policy, the Saudis likely see climate policy as a way to collaborate with global partners and get back in the good graces of former allies.


Green Initiative: What is it?


The Saudi Press Agency said the two initiatives are broadly part of the Kingdom’s plan that defines “an ambitious road map that rallies the region and significantly contributes to achieving global targets in confronting climate change.”

The press agency specifically mentioned desertification as a main climate change concern for Saudi Arabia and the region. The initiatives plan to increase cover vegetation, reduce carbon emissions, and preserve marine habitats.

Both initiatives will have smaller initiatives within them to address specific topics including planting trees, land rehabilitation, and more. The Kingdom is targeting a 4% contribution to global targets limiting land degradation and a 1% contribution to the global initiative to plant 1 trillion trees.


Another eye-catching goal laid out in the announcement is Saudi Arabia’s plan to convert 50% of its energy consumption to renewable sources by 2030.  The goal is lofty as less than 1% of the Kingdom’s energy currently comes from renewables.


The announcement was lighter on details about the Middle East Green Initiative, but it did mention knowledge-sharing, Saudi Arabia’s commitment to plant 40 million trees outside of the Kingdom, and the need to focus on international collaboration on the issue.


The ambitious environmental plans are part of Saudi Arabia’s larger Vision 2030, the wide-reaching project to diversify the Kingdom’s economy and attract foreign investment outside of the oil sector.


International Reaction


The announcement received positive attention from foreign heads of states and regional partners.

UK Foreign Secretary Dominic Raab said, “We welcome Saudi Arabia’s plan to plant 10 billion trees, combat pollution & preserve marine life as an important step in their climate ambition. As COP26 President we’ll work with Saudi Arabia to support their drive to protect the planet ahead of COP26.”

Russia is also set to work with Saudi Arabia on the initiative as The Russian Direct Investment Fund (RDIF) said it is “very impressed” by MBS’s ambitions.

A spokesperson for UN Secretary-General Antonino Guterres said “we’re following with great interest the efforts made by countries like Saudi Arabia to step up their climate ambitions.”

Saudi Arabia and bin Salman have been marred in an international diplomacy snare since the assassination of Jamal Khashoggi and the Kingdom’s heavy-handed role in the Yemeni Civil War and the destabilization of Yemen. As Vision 2030 and Saudi Arabia’s economic diversification plans rely heavily on drawing in foreign investment, the Kingdom is in need of some positive PR.


Ahead of COP26 in Glasgow, Saudi Arabia has laid down ambitious plans, ones that mirror its Western partners, such as Prime Minister Boris Johnson’s tree-planting initiative.

While Saudi Arabia desperately needs to counteract the negative impacts of climate change for its own national security and ecology, the planned initiatives also serve as an international PR boon. And that begs the question, are MBS and the Kingdom of Saudi Arabia serious about climate change?


Economy Built on Oil or Green Paradise?


One of the announced initiatives that has received the most international press is the Kingdom’s plan to plant 10 billion trees within their borders. But Saudi Arabia is the third-driest country on Earth, and without details on how the country plans to plant all the trees, sceptics will remain wary of the tree-planting bonanza.


Some environmental activists and climate scientists are buoyant about tree-planting’s potential to reverse some impacts of climate change. But other scientists have pointed to overhyped statistics and argued that planting trees is not a catch-all solution that avoids addressing the real problem.

Simply put, planting trees can help the overall environment and help mitigate carbon emissions, but reforestation is a complex endeavour. The bigger problem that faces the world climate is greenhouse gas emissions.


The announcement of the Green Initiative does include a promise to increase renewable energy consumption to 50% of the country’s energy, but how the number two oil producer in the world can achieve such a feat seems far-fetched in the short timeframe of nine years.

In recent years, Saudi Arabia has shown little effort in meeting its Paris Agreement goals with other big oil-producing states like Russia and the United States in a similar boat.

Like many other countries, Saudi Arabia has failed to meet their modest climate targets in the past. Ahead of COP26, it means the Kingdom has plenty of room to improve or follow down a familiar path, using ambitious climate projects as bait for foreign investment and improved foreign relations rather than a genuine


Corporate citizenship

Successful companies invest in high-quality products and businesses.  Standout companies, those able to create positive change to their surroundings, invest in people.  The Savola group invests in both.  This company found its roots in the import business, beginning by importing vegetable oil to local markets in 1979.  Even though the company was not unique in its business, it was “able to carve out a niche for ourselves by listening carefully to our customers’ needs and preferences.”  The Savola Group did not have rich backers or strong political ties, they simply listened, cared, and provided what customers wanted.  In 1998, the group expanded by investing in a local sugar refinery in Jeddah, Saudi Arabia.  Since its inception, the company has supported local businesses, giving them the backing they need to succeed. 

Investing in local businesses, however, is just one aspect of what makes the Savola Group stand out amongst its competitors.  The company also invests in improving the lives of those in their community.  The company recently implemented the Savola Bridges for Social Responsibility, where they are dedicated to values based in corporate citizenship.  This department runs the Savola’s Center for Empowering Persons with Disabilities, “which trains and employs persons with disabilities is its strategic initiative for corporate social responsibility stemming from its belief in the program, its value, and impact on the lives of persons with disability.”  Savola Bridges also funds a Children’s Ability Program (CAP), which supports the rehabilitation of sick or injured children.  The company’s slogan, Values Built on Values, is exemplified by these and other programs that support and improve the lives of those in their community.

Having high-quality imports in local stores is fantastic, but having that profit invested back into the community is even better.  Doing both? Just look at the Savola Group. They, simply put, change lives.

Does this sound like the image you want your company to portray? Pegasus Strategic Advisory can help your company have a positive impact and play its part in creating positive social change. Get in touch to find out more.