Climate change poses significant challenges with regard to economic development in North Africa. The region is experiencing rising temperatures, increased frequency of extreme weather events and heightened water scarcity, all of which directly threaten economic stability. These climate impacts necessitate urgent adaptation and transformation of production systems. The current development model for North Africa is characterized by low material efficiency and high environmental costs and the ecological deficit of the subregion is large compared with that of other parts of the world. This is primarily owing to the unsustainable exploitation of natural resources, in particular in water-stressed regions. Improving material efficiency and reducing environmental footprints are critical for long-term growth and stability. A significant transformation is needed to align economic models with planetary boundaries.
Sustainable corporate governance is essential for guiding this transformation. However, North African firms, especially small and medium-sized enterprises, face significant barriers that hinder them from adopting sustainable practices. These challenges include limited access to finance, a lack of information and a regulatory environment that is not fully supportive of sustainability goals. To address these issues, a comprehensive strategy is proposed in the present report that includes increasing awareness, fostering environmental, social and governance practices, and supporting firms in building resilience to climate risks.
The main recommendations made are focused on the need for a shared vision whereby sustainability is integrated into economic planning. This involves defining local planetary boundaries and setting new well-being goals that reflect these limits. A participatory approach is advocated in the report, whereby Governments, businesses and citizens collectively define and pursue these objectives.
Furthermore, enhancing awareness and education around sustainability is crucial. Firms need access to information, tools and training to effectively transition to sustainable governance. Climate change education should be incorporated into public campaigns and school curricula in order to build a culture of sustainability.
Market incentives, regulatory frameworks and financial support mechanisms are identified in the present report as vital tools for driving this transition. It is recommended that favourable conditions for sustainability should be created, such as through green procurement policies, reduced value added tax for sustainable goods and financial incentives for firms adopting environmental, social and governance practices. Emphasis is also placed on the importance of clear government road maps that guide businesses in aligning their operations with national sustainability strategies.
The integration of environmental, social and governance principles into corporate governance is crucial. Governments should accelerate the adoption of international standards and provide targeted support to small and medium-sized enterprises to help them to meet these requirements. Large companies have a significant role to play by promoting sustainable practices across their supply chains and supporting smaller suppliers in this transition.
In conclusion, North Africa must rapidly align its development model with sustainability in order to secure its economic future. The private sector’s role is indispensable in this effort, but supportive policies, increased awareness and coordinated action across all stakeholders are also required. The recommendations made in the present report are aimed at creating an enabling environment in which firms can contribute effectively to a resilient and sustainable economy.
