Note: The insights below were first published in the September 2025 issue of the Union of Investment Companies‘ The Investor Magazine. The latest edition highlights how ESG is taking center stage in the wider Kuwait economy, especially in the investment sector where environmental, social and governance considerations are becoming fundamental indicators of sustainability and potential success in a dynamic economic landscape.
We’re grateful to have been invited to contribute to the latest edition of their publication and discuss ESG within the context of Kuwait‘s economy, among others.
By Harry van Schaick, Managing Editor, Oxford Business Group
With energy and financial services being key economic sectors in Kuwait, Oxford Business Group highlights progress made by companies in these sectors towards ensuring sustainable growth.
Kuwait, known internationally for its abundant oil reserves, is at a crossroads between this legacy wealth from hydrocarbons and the growing imperative to transition towards more sustainable growth. Clearly, economic growth remains robust, with GDP growth estimated at 1.9% for 2025 and 3.196 for 2026, according to the IMF. Recent years have seen the country pivot to a development model that prioritises resilience over resource dependency. At the center of this transformation is the integration of environmental, social and governance (ESG) principles across both the public and private sectors. As the government accelerates towards Vision 2035, ESG frameworks are now influencing capital allocation, operational practices and institutional governance in some of Kuwait’s most critical sectors.
Decarbonising Kuwait’s energy backbone
In OBGs’ recent ESG research on the hydrocarbons conducted in collaboration with state-owned enterprises Kuwait Oil Company (KOC) and Kuwait Gulf Oil Company (KGOC), the country’s net-zero target by 2050 is at the heart of their operational transformation, making Kuwait one of the first upstream-heavy economies in the region to formally adopt such a target. The approach is two-pronged: in the near term, the companies have prioritised operational efficiency and emissions control, while in the longer term they are laying the foundations for carbon capture and renewable energy integration.
One of the most striking achievements highlighted in our report with KOC and KGOC is the significant reduction in greenhouse gas output from gas flaring-historically one of Kuwait’s largest sources of emissions. By modernising flare stacks with low emission burners and deploying real-time flare monitoring, the companies have both improved local air quality and curtailed routine flaring. This operational gain is supported by advanced data analytics platforms that enable swift responses to unplanned flare events…
What is your take on the current economic climate in Kuwait and its FDI prospects?
ANDREW JEFFREYS: I have been coming to Kuwait since 1996 and OBG has been present here for 20 years, and I definitely feel the country is experiencing a renewed sense of momentum. The fundamentals − low inflation, a small population, one of the largest sovereign wealth funds globally, and significant natural resources − remain as solid as ever. There’s genuine optimism, fueled by a more proactive government engaging seriously with reform. Despite global economic headwinds, Kuwait has managed to maintain focus on infrastructure and investment. The country has weathered inflation and rising interest rates more effectively than many others across the emerging world. Foreign investment remains a critical pillar of long-term growth. Legal clarity, institutional trust, and ownership rights are key − and Kuwait is making strides in all these areas. Investors are looking for environments where they can operate with confidence, and Kuwait absolutely checks those boxes…
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