GCC's sustainable revolution

Visa, a global leader in digital payments, unveiled the results of its '2023 Sustainable Commerce' study during the United Nations Climate Change Conference (COP28), focusing on the landscape of sustainable commerce in the United Arab Emirates (UAE), Kingdom of Saudi Arabia (KSA), Kuwait and Qatar. The study delves into the intricate dynamics of consumer behaviors, banking preferences, and the challenges faced by businesses in embracing sustainability.

Consumers Pave the Way

Across the four markets, consumers are taking charge, with over two-thirds recognizing that decarbonization is not solely the responsibility of corporate entities. Furthermore, nearly half the consumers surveyed stated climate change as a top challenge faced by society.

Saudi Arabia emerges as a leader in environmental practices, with 86% actively reducing paper usage, surpassing the GCC average. On the other hand, Qatar consumers are also at the forefront when it comes to water conservation and reducing paper usage (85%) and rank first in ethical sourcing by supporting local farmer’s market (73%) across the GCC. Kuwait consumers are focused on reducing paper usage (84%). Whereas UAE consumers are leading in water conservation (86%) and rank second in ethical sourcing by supporting local farmer’s market (70%) across the GCC.

Additionally, Qatar takes the lead in reducing single-use plastics with a rate of 82%, followed by 75% in the UAE, both surpassing the GCC average of 72%

A third to half of all consumers in the Visa 2023 Sustainable Commerce Study – depending on their location – say they consciously choose sustainable products, even if they have to pay a premium for them.

Even the next generation across the GCC are leaning towards sustainable choices, with parents noting a heightened receptiveness among young consumers. Influencers include family members (59%), social media (57%), and school mandates (51%).

Banking on Sustainability

The study discovered a significant trend among future bank customers across UAE, KSA, Kuwait and Qatar, with an average 71% expressing a willingness to endorse banks that provide sustainable payment options. Green credentials matter, as 66% of consumers reported choosing a bank based on its sustainability practices in the last 12 months.

Rewards for sustainable behaviors emerge as a significant draw, with an average of 71% of GCC consumers willing to make a sustainable card their primary one. While current sustainability evaluations focus on reducing paper and byproduct usage, consumers consider various factors such as simplified net banking (48%) in KSA, going paperless (52%) in the UAE, environmentally conscious operations (41%) in Kuwait, and promoting cashless payments (53%) in Qatar when assessing bank providers.

Navigating Barriers to Sustainability

In the GCC, a significant barrier for the majority of consumers (51%) lies in the perceived higher cost of sustainable products, coupled with a lack of awareness (51%) regarding the environmental and social impact of consumption choices. However, as societal consciousness expands, the study indicates a growing preference for businesses that actively demonstrate sustainable practices.

Businesses at the Crossroads

Qualitative interviews shed light on the challenges faced by businesses, particularly MSMEs and KOLs, in fully grasping the concept of sustainability. Barriers include cost implications, fear of change, competition pressures, and resource constraints. However, enablers such as regulatory policies, sustainable financing, and collaborative efforts among stakeholders offer a path forward.

In conclusion, the '2023 Sustainable Commerce' study not only provides a snapshot of the current sustainability landscape in the GCC but also serves as a call for collective action. It paints a picture of a nation on the cusp of a sustainable revolution, with consumers, banks, and businesses poised to navigate challenges and embrace a more sustainable future.

Learn more about Sustainable Commerce 2023 and join us in shaping a greener tomorrow with digital payment.