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Saudi Arabia

8. Responsible Business Conduct

There is a growing awareness of corporate social responsibility (CSR) in Saudi Arabia. The King Khalid Foundation issues annual “responsible competitiveness” awards to companies doing business in Saudi Arabia for outstanding CSR activities. In March 2021, the SAG approved the formation of a committee on corporate social responsibility in the Ministry of Human Resources and Social Development.

Saudi Arabia does not participate in the Extractive Industries Transparency Initiative.

Country Reports on Human Rights Practices:

List of Goods Produced by Child Labor or Forced Labor: 

Sweat & Toil: Child Labor, Forced Labor, and Human Trafficking Around the World: 

Comply Chain: 

The SAG announced the first Saudi National Environmental Strategy in 2018. The strategy included a comprehensive restructuring of the environmental sector, the establishment of the Directorate of Environment under the Ministry of Environment, Water, and Agriculture (MEWA), and the creation of the Environmental Special Forces under the Ministry of Interior. The SAG also formed five specialized environmental centers: the National Center for Waste Management, the National Environmental Compliance Center, the National Center for the Development of Vegetation Cover and Combating Desertification, the National Center for Wildlife Conservation, and the National Meteorological Center.  In addition, the Kingdom established the National Environmental Fund to support environmental research and the development of environmentally friendly technologies. In March 2021, Crown Prince Mohammed Bin Salman announced the Saudi Green Initiative (SGI) and the Middle East Green Initiative, which are part of Vision 2030 and place Saudi Arabia at the center of regional efforts to meet international targets for climate change mitigation.

In October 2021, Saudi Arabia announced its intention to reduce, avoid, and remove greenhouse gas emissions by 278 million tons of CO2 equivalent annually by 2030, more than a two-fold increase of its initial nationally determined contribution (NDC). The Kingdom committed to moving to net-zero emissions by 2060 and signed the Global Methane Pledge.  In April 2021, Saudi Arabia joined the United States, Canada, Norway, and Qatar to establish the Net-Zero Producers Forum. The forum aims to explore practical net-zero emission strategies, including methane abatement, carbon capture, and clean energy.

Energy Minister Prince Abdulaziz bin Salman Al Saud noted that Saudi Arabia would welcome foreign investment in its climate initiatives but will not require outside financial support to achieve its climate goals.  It does, however, need expertise, capacity-building, and technology-sharing.  He emphasized that the timeline for these goals could shift, depending on new technologies and the country’s ability to grow its economy.

Saudi Arabia’s flagship environmental initiative is the Circular Carbon Economy (CCE), which it announced during its G20 presidency in 2020. The CCE consists of the “4Rs” model of “reduce, reuse, recycle, and remove” to manage greenhouse gas emissions – a way to offset its carbon emissions while continuing to pump oil.  The Kingdom plans to transform the coastal cities of Jubail and Yanbu, both homes to petrochemical, steel, and other heavy industries, into global hubs for carbon capture utilization and storage (CCUS).

By 2030 the SAG plans to generate 50 percent of the country’s electricity from renewables and the other half from natural gas.  Currently, 40 percent of electricity generation comes from the burning of crude oil.  Saudi company ACWA Power, in which the PIF has a 50 percent stake, has been tasked with developing 70 percent of Saudi renewable energy projects.  ACWA Power’s first project under PIF funding, a solar plant in the central city of Sudair, will be one of the largest single-contracted solar PV plants in the world, with an installed capacity of 1,500 megawatts capable of powering 185,000 homes and offsetting nearly 2.9 million tons of emissions each year.

As it seeks to diversify its energy sources away from oil, Saudi Arabia aims to become the world’s largest supplier of hydrogen.  The Kingdom’s goal is to produce 2.9 million tons/year by 2030 and four million tons/year by 2035 of blue and green hydrogen. Aramco recently signed an initial agreement to build a green hydrogen and ammonia plant with Hong Kong-based green hydrogen developer InterContinental Energy, bringing private investment into the sector. In 2020, U.S. industrial gas producer Air Products, ACWA Power, and NEOM signed a $5 billion agreement to build a green hydrogen plant powered by four gigawatts of wind and solar power.  The completed facility will produce 650 tons of green hydrogen daily, enough to run around 20,000 hydrogen-fueled buses.  The fuel will be shipped as ammonia to end markets globally, and production is expected to start in 2025.  Challenges remain in the hydrogen sector.  The required technology for green and blue hydrogen is still nascent, production costs are high, and the market for these types of hydrogen is being developed.

Saudi Arabia aims to recycle 100 percent of solid waste in Riyadh by 2025 and 82 percent of all waste streams countrywide by 2035.  Waste management is a nascent industry, and current recycling stands at only one percent. To reach its waste management goals, the Saudi Investment Recycling Company (SIRC), a wholly owned subsidiary of the PIF, was established in 2017. SIRC is mandated to develop, own, operate, and finance projects across all waste types to establish recycling capacities and build a circular economy.

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