Overview of SCA Decision 3/RM/2020
Introduced: January 2020 (Corporate Governance Decision)
Effective from: FY 2020 reports (submitted in H1 2021)
Last modified: June 2022 (guidance update); further IFRS S1/S2 alignment expected in 2025
Region(s): UAE
About SCA Decision 3/RM/2020
Under Article 76 of the UAE Securities and Commodities Authority’s (SCA) Decision 3/RM/2020, all public joint-stock companies (PJSCs) listed on the Abu Dhabi Securities Exchange (ADX) or Dubai Financial Market (DFM) must publish an annual Sustainability Report.
This report is due within 90 days of year-end or prior to the company’s annual general meeting. Current guidelines reference the Global Reporting Initiative (GRI) and TCFD, with updates expected to incorporate IFRS S1/S2 standards by 2025.
The rule reflects the UAE’s broader ESG push under “We the UAE 2031,” emphasizing transparency, long-term value creation, and market readiness for global capital flows.
Criteria for compliance
All public joint-stock companies (PJSCs) listed on ADX or DFM and dual-listed foreign issuers operating on these exchanges are also in scope.
Compliance timeline
FY 2020
First reports required (submitted in 2021)
FY 2021 onward
Annual sustainability report due within 90 days of fiscal year-end
2025 (expected)
SCA reviewing upgrades to climate disclosure rules, including potential IFRS S1/S2 adoption
Disclosure requirements
- Qualitative narrative on ESG strategy, governance, stakeholder engagement, and long-term sustainability priorities.
- Quantitative KPIs, including:
- Energy use and GHG emissions
- Water and waste metrics
- Workforce and diversity indicators
- Board structure and independence
- Companies must explain materiality assessments, risks, and impact
- Reports must follow SCA ESG guidance, which is GRI-based and TCFD-referenced
Key obligations
- Submit sustainability report alongside annual financials or ahead of their Annual General Meeting (AGM)
- Make report publicly accessible
- Board-level accountability for ESG strategy and disclosures
- Prepare for expected enhancements to climate-related requirements
Third-party assurance
Voluntary under current regulations. Companies may pursue external limited assurance to increase investor confidence or prepare for future mandatory requirements.
Penalties for non-compliance
- Fines and sanctions from the SCA for failure to submit or inaccurate reporting
- Public censure or trading suspension possible for repeated or material noncompliance
- Heightened reputational risk, particularly among ESG-focused institutional investors
