Across the Gulf, climate change is already an operating condition. Cooling accounts for nearly half of peak electricity demand in the Middle East and North Africa, according to the International Energy Agency.

The World Resources Institute counts 83 per cent of the region’s population as living under extremely high water stress.

The disruption to shipping through the Strait of Hormuz since late February has shown how much of the Gulf’s food and water security rests on imports and on gas-fired desalination. For a region in this position, the case for sustainable innovation begins with adaptation.

By sustainable innovation I mean rethinking products, services and business models so that environmental and social concerns are built into them, and so that economies can ultimately function within planetary boundaries.

When it comes to climate, most of that effort over the past two decades went into cutting emissions. Adaptation means preparing economies and communities for the effects of a changing climate.

For years it sounded to many like an admission of defeat, as if preparing for a hotter world meant giving up on slowing the warming. That view is fading quickly, because the impacts have arrived. In the Gulf, the two agendas have to advance together, and the most valuable innovations are those that serve both.

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Several Gulf innovations do double duty. Dubai’s Hassyan desalination plant, due for completion in early 2027, is designed to run on solar power and supply drinking water to around two million people.

According to the International Energy Agency, most desalination in the region still relies on oil and gas, so a solar-powered plant both cuts emissions and makes the water supply less dependent on those fuels.

Saudi Arabia’s National Water Strategy aims to raise the share of treated wastewater the Kingdom reuses from about a quarter in 2023 to more than 70 per cent. Meeting that goal would ease the pressure on aquifers and on desalination alike. District cooling networks and better building design reduce the energy needed for cooling, the largest single driver of peak power demand.

Vertical farms grow fresh food close to the cities they supply. Bustanica, the vertical farm owned by Emirates Flight Catering in Dubai, says it grows leafy greens with up to 95 per cent less water than conventional farming.

The transition is not going to be a walk in the park. Hydrocarbon revenue still underpins public budgets across the Gulf, and that dependence shapes the pace at which governments and companies can move away from oil and gas.

There will be very difficult trade-offs and strategic decisions for societies, for businesses and for governments, and naming those choices early leaves more time to manage them.

Against those constraints, the Gulf holds an advantage that Europe and the United States currently lack: a long planning horizon. The European Union has narrowed its corporate sustainability reporting rules in the name of competitiveness.

In the United States, federal climate policy has been rolled back while several states push in the opposite direction. Gulf governments plan around long-dated national commitments, from Saudi Arabia’s Vision 2030 and the Kingdom’s target of net zero by 2060 to the United Arab Emirates’ Net Zero 2050 strategy. For an investor weighing a project that will operate for twenty or thirty years, that predictability is an asset.

Predictability earns trust only when delivery matches what has been announced. Investors and partners look closely at whether projects start operating on schedule, and whether their results are measured in ways that allow comparison with projects elsewhere. When announcements run ahead of delivery, scrutiny follows, from inside and outside the region.

For business leaders, adaptation belongs in core strategy and capital allocation, alongside cutting emissions. In practice, that means asking how exposed each major asset will be to heat, water scarcity and supply disruption over its working life, and pricing the answer into the investment case.

Sustainable innovation does not take place in a vacuum. It requires leadership, organizations, structures and processes. A pilot that succeeds in an innovation lab can stall once it meets procurement rules and incentives designed for the old way of operating.

Leaders who want new solutions to scale have to redesign those rules and incentives, and give a senior executive the authority and the budget to lead that work.

A company can also adapt only so far on its own. Shocks travel through suppliers, customers and lenders, and through the utilities and public services that employees rely on to get to work and stay healthy in extreme heat.

A logistics firm that cools its own warehouses still needs a power grid that holds during a heatwave and roads that stay open after a flash flood, like the one that brought much of Dubai to a standstill in April 2024. That is why leadership now includes investing, with others, in the resilience of the system around the firm.

Such investment can mean building shared cooling and water infrastructure with peers, partnering with municipalities and utilities, or running supplier programmes that split the cost of adaptation.

Much of this corporate effort depends on conditions that governments and investors set. The long horizon has to hold through oil-price swings and political cycles, because the region’s advantage fades once investors start to treat its plans as negotiable. I would argue that adaptation needs to become investable as well.

Adaptation projects often pay off in losses avoided, a kind of return that is hard to finance on commercial terms. Private capital could fund far more than a handful of flagship projects if governments used public procurement to reward resilience, blended finance to lower the risk for lenders, and clear standards to measure adaptation outcomes.

At COP30 in Belém, governments called for efforts to at least triple adaptation finance by 2035, and Gulf capital is well placed to help turn that call into committed funding.

COP31 opens in Antalya on 9 November, with Türkiye presiding and Australia leading the negotiations. It gives the Gulf a platform to show, with projects in operation, that adaptation and emissions cuts can advance together.

Sustainable innovation will reach almost every part of daily life in this region, from the water people drink to the buildings they work in.

The harder test comes after the summit, once attention moves elsewhere, and the rewards will go to the governments and companies that keep building steadily through those quieter years.

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