Omnipreneurship Newsletter

Before we get into our updates, a quick refresh of the Sustainability Unit’s mission and vision statements:

Vision: Establish ADG and its subsidiaries as strategic, data-driven, and industry-leading sustainable businesses with a “AAA” MSCI ESG Rating by 2030

Mission: Support ADG’s business verticals to create value by optimizing current business performance and resilience, scaling businesses, and fostering strategic partnerships

MSCI Provisional ESG Ratings

We’ve made progress on our MSCI Provisional ESG Baselining Activity. Three companies have received their inaugural ratings, two analyses are pending, and one kick-off is taking place this quarter. The goal is to position each company as ESG Leaders in their respective industries by 2030. We are already working with the verticals to create their tailored sustainability roadmaps by engaging with the sustainability teams and key internal stakeholders.

Key External Events

COP28

The 28th Cooperation of Parties (COP28) was hosted in Dubai, UAE in November 2023. This marks the first time a COP was hosted in the GCC. It was at the site of The Saudi Green Initiative’s (SGI) 3rd Forum to discuss climate-related efforts across Saudi Arabia with esteemed panelists including Yasir Al-Rumayyan, CEO of PIF and H.R.H. Princess Haifa Bint Mohammad Al-Saud, Vice Minister of Tourism. Tanmiah Food Company participated in the Saudi Pavilion with their One Million Tree Initiative. There was much discussion on practically achieving the SDGs by 2030 and a keen focus on climate-related financing and the role of regional financial institutions to support private sector entities to achieve their targets.

Davos Annual Meeting 2024 “Rebuilding Trust”

ADG participated at WEF’s 54th Annual Meeting held in Davos and was around the theme of “Rebuilding Trust”. 3,000 leaders from 125 joined the meeting to discuss critical global priorities. Topics included:

1. Environmental: climate change and nature action and energy security,
2. Social: Workforce reskilling and job mobility
3. Governance: Generative AI and its governance, and building social enterprises through strong governance

The Sustainability Glossary

This newsletter’s sustainability glossary is focused on the governance pillar with a few key definitions.

• Corporate Governance: They system by which companies are directed and controlled – Sir Adrian Cadbury (1992).
• RAFT: Stands for Responsibility, Accountability, Fairness and Transparency.
• Corporate Veil: Concerns the separate legal personality of the company from the owner/shareholders
• Code of Ethics: Provides guidance and set common ethical standards to promote consistency in behavior across all levels of the organization
• Code of Conduct: Governs the actions and working relationships of board members, senior management, and colleagues in dealing with all stakeholders

The Glossary in Practice

While there are many definitions of corporate governance the most synthesized is Sir Adrian Cadbury’s definition. Other entities such as the World Bank and the CMA have more expanded definitions that touch upon key stakeholders

RAFT is a corporate governance principle. Boards should ensure that their deliberations, decisions, and actions are founded on principles underpinning good governance

The Quarterly Q&A

Q: Why are the benefits of strong corporate governance?

A: According to an IFC study conducted in 61 companies across 45 countries, companies that improved corporate governance during the investment period, achieved ~20% higher performance in terms of return on equity (ROE) and return on invested capital (ROIC). This illustrates a positive correlation between strong corporate governance and financial success. Corporate governance is about direction setting and ensuring proper control systems are in place to have an effective company regardless of industry, geography, or corporate maturity. If companies do not focus on ensuring proper governance they are leaving untapped value on the table.